Question
In: Accounting
Company paid $60,000 to buy back 12,000 shares of its $1 par value ordinary shares.
Company paid $60,000 to buy back 12,000 shares of its $1 par value ordinary shares. These shares were sold later at a selling price of $7 per share. The entry to record the sale includes a
a. credit to Share Premium–Treasury for $24,000.
b. credit to Retained Earnings for $24,000.
c. debit to Share Premium–Treasury for $60,000.
d. debit to Retained Earnings for $60,000.
Solutions
Expert Solution
Cost of treasury shares= $60,000
Number of treasury shares = 12,000
Selling price per treasury share = $7
Cash received from sale of treasury share = Number of treasury shares x Selling price per treasury share
= 12,000 x 7
= $84,000
Amount credited to share premium- treasury = Cash received from sale of treasury share - Cost of treasury shares
= 84,000-60,000
= $24,000
The following entry will be made to record sale of treasury share:
| General Journal | Debit | Credit |
| Cash | 84,000 | |
| Treasury share | 60,000 | |
| Share premium- treasury | 24,000 |
Correct option is a.
ekkarill92 answered 2 years agoRelated Solutions
11.) Melon Company has outstanding 400,000 shares of $10 par value ordinary shares. The company declares...
11.) Melon Company has outstanding 400,000 shares of $10 par
value ordinary shares. The company declares a 5% shares dividend
when the fair value of the shares is $65 per share. Prepare the
journal entries for Melon Company for both the date of declaration
and the date of distribution.
12.) Use the information from QUESTION 11, but assume Melon
Company declared a 100% shares dividend rather than a 5% shares
dividend. Prepare the journal entries for both the date of...
On 1 January 2019, Colson Company had 200,000 ordinary shares outstanding with par value of $l...
On 1 January 2019, Colson Company had 200,000 ordinary shares
outstanding with par value of $l each that originally issued at $18
per share. On 1 April 2019, 20,000 ordinary shares were issued at
$25 per share and on 1 May, the company issued 5% bonus issue as
stock dividend for both ordinary shares and preference shares.
During the year, 30,000 treasury shares were repurchased from
the open market at $35 on 1 September 2019. On 1 March 2019, the...
Berna Company was organized on January 1, 2019, 25,000 ordinary shares of P100 par value being...
Berna Company was organized on January 1, 2019, 25,000 ordinary
shares of P100 par value being issued in exchange for property,
plant and equipment valued at P3,000,000 and cash of P1,000,000.
The following data summarize activities for the year. 1. Net income
for the current year was P1,000,000. 2. Raw materials on hand on
December 31 were equal to 25% of raw materials purchased. 3.
Manufacturing costs were distributed as follows: Materials used
Direct labor Factory overhead. 50% 30% 20%...
Berna Company was organized on January 1, 2019, 25,000 ordinary shares of P100 par value being...
Berna Company was organized on January 1, 2019, 25,000 ordinary
shares of P100 par value being issued in exchange for property,
plant and equipment valued at P3,000,000 and cash of P1,000,000.
The following data summarize activities for the year. 1. Net income
for the current year was P1,000,000. 2. Raw materials on hand on
December 31 were equal to 25% of raw materials purchased. 3.
Manufacturing costs were distributed as follows: Materials used
Direct labor Factory overhead. 50% 30% 20%...
Question text The original sale of the $10 par value ordinary shares of Gray Company was...
Question text The original sale of the $10 par value ordinary
shares of Gray Company was recorded as follows:
Cash.............................................................................................
430,000 Share
Capital—Ordinary.................................................
350,000 Share
Premium—Ordinary..............................................
80,000 Instructions Record the treasury share transactions (given
below) under the cost method: Transactions: (a) Bought 300 ordinary
shares as treasury shares at $22. (b) Sold 90 shares of treasury
shares at $19. (c) Sold 120 treasury shares at $28.
As at 31 December 2018, Conrad Company has 850,000 ordinary shares outstanding with par value of...
As at 31 December
2018, Conrad Company has 850,000 ordinary shares outstanding with
par value of $5 each that originally issued at $15 per share. On 1
April 2019, Conrad issued 100,000 shares of 8%, $10 par value
cumulative convertible preference shares (convertible into 200,000
common shares) and purchased 60,000 ordinary shares on the open
market as treasury stock by paying $30 per share.
On 1 June 2019,
Conrad declared and issued a 2-for-1 share split. The company also
issued...
Part II Maria Limited is authorized to sell 1,000,000 its $10 par value ordinary shares. As...
Part II Maria Limited is authorized to sell 1,000,000 its $10
par value ordinary shares. As at the end of the current year, the
company has actually sold 500,000 ordinary shares at $15 per share.
In addition, of the 500,000 ordinary shares that have been sold,
40,000 shares have been repurchased at $80 per share to be used to
meet the future requirements of a share option plan that the
company intends to implement.
Required: Prepare the general journal entries...
Briefly discuss the methods available for a company to buy back its shares and explain why...
Briefly discuss the methods available for a company to buy back
its shares and explain why you might expect the share price
reaction to the announcement of each of these methods to
differ.
Pomona Corporation issued 60,000 shares of $3 par value common stock at $21 per share and 9,000 shares of $30 par value
Treasury Stock Pomona Corporation issued 60,000 shares of $3 par value common stock at $21 per share and 9,000 shares of $30 par value, ten percent preferred stock at $85 per share. Later, the company purchased 2,000 shares of its own common stock at $23 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Pomona sold 1,500 shares of the treasury stock at $30 per share. Prepare the general journal...
A company has 950 shares of $63 par value preferred stock outstanding. It also has 12,000...
A company has 950 shares of $63 par value preferred stock
outstanding. It also has 12,000 shares of common stock outstanding,
and the total value of its stockholders' equity is $471,450. The
company's book value per common share equals:
Multiple Choice
$36.41.
$34.30.
$31.78.
$35.33.
$39.29.
A corporation issued 200 shares of its $5 par value common stock
in payment of a $2,800 charge from its accountant for assistance in
filing its charter with the state. The entry to record...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- For Questions 1-3: consider the following code: public class A { private int number; protected String...
- You are tasked with assessing the health department’s intervention program in preventing recurrence of acute alcohol...
- Compare the MOSFET, JFET , and BJT and identify the reasons these devices behave differently. What...
- How would you use SAS Enterprise Miner to create a neural network model of your example?
- Explain the use of neural networking modeling in predictive analytics.
- Current Market Mix of Netflix, as detail as possible, please.
- This is all one question, thank you so much in advance! You must evaluate a proposal...
ADVERTISEMENT