in 2018, camrim corporation purchases 1,000 shares of tresury stock for $11 per share. in 2019...

in 2018, camrim corporation purchases 1,000 shares of tresury stock for $11 per share. in 2019 camrim reissues 110 shares of the tresury stock for $13 per share. in 2020, camrim reissues 440 shares of its tresury stock for $8 per share. the journal entry to record the reissuance of tresury stock year 2020 will debit retained earnigns for $______

Expert Solution

In 2018, 1,000 shares of treasury stock were purchased at $11 per share.

In 2019, 110 treasury share were sold at $13 per share.

Thus, in 2019, PIC in excess of par - treasury stock would be credited by = Number of share issued x (Selling price per share - Cost price per share)

= 110 x (13 - 11)

= $220

In 2020, 440 of treasury shares were sold at $8 per share . Since the treasury shares were sold below cost, hence PIC in excess of par - treasury stock will be debited by the available balance in PIC in excess of par - treasury stock and debited to retained earnings.

The total amount to be debited = Number of share issued x (Cost price per share - Selling price per share)

= 440 x (11 - 8)

= $1,320

PIC in excess of par - treasury stock would be debited by = $220.

Retained earnings would be debited by = The total amount to be debited - Amount debited to PIC in excess of par - treasury stock

= 1,320 - 220

= $1,100

ekkarill92 answered 2 years ago

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