In: Accounting
On October 10, the stockholders’ equity of Sherman Systems
appears as follows.
Common stock–$10 par
value, 81,000 shares authorized, issued, and outstanding |
$ | 810,000 | |
Paid-in capital in excess of par value, common stock | 261,000 | ||
Retained earnings | 936,000 | ||
Total stockholders’ equity | $ | 2,007,000 | |
1. Prepare journal entries to record the following
transactions for Sherman Systems.
a. Purchased 5,900 shares of its own common stock at $34 per share on October 11.
b. Sold 1,225 treasury shares on November 1 for $40 cash per share.
c. Sold all remaining treasury shares on November 25 for $29 cash per share.
2. Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase.
Date | Title | Debit | Credit |
Oct-11 | Treasury Stock (5,900*$34) | $ 200,600 | |
Cash | $ 200,600 | ||
(To record repurchase of 5900 own sahres) | |||
Nov-01 | Cash (1,225*$40) | $ 49,000 | |
Treasury stock (1,225*$34) | $ 41,650 | ||
Paid in capital-Treasury Stock | $ 7,350 | ||
(To record sale 1225 shares from treasury stock) | |||
Nov-25 | cash (5,900-1,225)*$29) | $ 135,575 | |
Paid in capital-Treasury Stock | $ 7,350 | ||
Retained earnings | $ 16,025 | ||
Treasury stock (5,900-1,225)*$34) | $ 158,950 | ||
(To record sale balance from treasury stock) |
2.
Common stock–$10 par value,
81,000 shares authorized, issued, and outstanding |
$ 810,000 |
Paid-in capital in excess of par value, common stock | $ 261,000 |
Retained earnings | $ 936,000 |
Total paid in capital and retained earnings | $ 2,007,000 |
Less: treasury Stock, 5,900 shares | $ (200,600) |
Total stockholders' equity | $ 1,806,400 |
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