"Debit treasury stock 153 million Credit cash 153 million
Debit retained earnings 306 million Credit treasury stock 153 million Credit additional paid in capital 153 million
What happened to the shareholders??? "
Ok, the books take a debit of 153M in stock. That is the approximate cost to us to originally buy back stock that was issued to us as a dividend. I don't know how that translates to a 153m credit other than that is the effect of not paying cash out.
The second set of statements: debit retained earnings 306m is about the cash equivalent of issuing the stock divy.[841mshares x.0107 x 34] second line of second statement credit 153m treasury stock is the temporary value of stock not paid as dividend. It is a credit, sort of, because the stock was added last year during a buyback. third line paid in capital of 153m . I might extend that word to "paid in kind" capital, because it is not actual income but the appreciated value of the 9million shares sent out as divy is still capital. But I have no training as an accountant and accounting shorthand and the assumptions that go with it.
It looks like the shareholders are conserving cash for the company's expected capital outlay to gear up for increasing demand. In the next year that stock divident[sic] will have higher value than the $0.37 it had yesterday.
I took a loose stab at it and now it is your turn to explain.