In: Accounting
On October 10, the stockholders’ equity of Sherman Systems
appears as follows.
Common stock–$10 par value, 76,000 shares
authorized, issued, and outstanding$760,000
Paid-in capital in excess of par value, common stock 236,000
Retained earnings 896,000
Total stockholders’ equity$1,892,000
1. Prepare journal entries to record the following transactions for
Sherman Systems.
Purchased 5,400 shares of its own common stock at $29 per share on October 11.
Sold 1,100 treasury shares on November 1 for $35 cash per share.
Sold all remaining treasury shares on November 25 for $24 cash per share.
2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
Journal entries | |||
Date | Accounts Name | Debit | Credit |
11-Oct | Treasury Stock ( 5400*29) | 156600 | |
Cash | 156600 | ||
( being shares reacquired ) | |||
1-Nov | Cash (1100*35) | 38500 | |
Treasury Stock ( 1100 * 29 ) | 31900 | ||
Additional paid in Capital- treasury stock ( 1100 * (35-29) ) | 6600 | ||
25-Nov | Cash (4300*24) | 103200 | |
Additional paid in Capital - trasury stock | 6600 | ||
Additional paid in Capital - common stock | 14900 | ||
Treasury Stock ( 4300 * 29 ) | 124700 | ||
LOSS ON NOV -25 Sale of treasury Stock
= ( 5400 - 1100 ) * ( 29-24 )
= 21500
balance sheet partial | |
october - 11th | |
Stock hoders equity | Amount |
common stock- $ 10 par value , 70600 shares issued and outstanding | 7060000 |
paid in capital in excess of par value | 236000 |
Reatained Earnings | 896000 |
contributed Capital | 8192000 |
less ; treasuty Stock ( 5400 Shares @ $29 ) | 156600 |
total | 8035400 |