Question
In: Accounting
On October 10, the stockholders’ equity of Sherman Systems appears as follows.
On October 10, the stockholders’ equity of Sherman Systems appears as follows.
| Common stock–$10 par value, 84,000 shares authorized, issued, and outstanding |
$ | 840,000 | |
| Paid-in capital in excess of par value, common stock | 276,000 | ||
| Retained earnings | 960,000 | ||
| Total stockholders’ equity | $ | 2,076,000 | |
1. Prepare journal entries to record the following transactions for Sherman Systems.
- Purchased 6,200 shares of its own common stock at $37 per share on October 11.
- Sold 1,300 treasury shares on November 1 for $43 cash per share.
- Sold all remaining treasury shares on November 25 for $32 cash per share.
Solutions
Expert Solution
| 1 | a. | Treasury stock | 229,400 | |
| Cash | 229,400 | |||
| 2 | b. | Cash | 55,900 | |
| Treasury stock | 48,100 | |||
| Paid-in capital, treasury stock | 7,800 | |||
| 3 | c. | Cash | 156,800 | |
| Paid-in capital, treasury stock | 7,800 | |||
| Retained earnings | 16,700 | |||
| Treasury stock | 181,300 |
Explanation
1.
- Treasury stock (6,200 shares × $37) = $229,400
- Cash (1,300 × $43) = $55,900
Treasury stock (1,300 shares × $37) = $48,100 - Cash (4,900 × $32) = $156,800
Treasury stock (4,900 shares × $37) = $181,300
Treasury stock (6,200 shares × $37) = $229,400
Robert Otieno answered 4 years agoRelated Solutions
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