Several years ago, Douglas Company issued 33,000 shares of its $1 par value common stock for...

Several years ago, Douglas Company issued 33,000 shares of its $1 par value common stock for $18 per share. In the current year, Douglas’s board of directors approves a plan to buy back a portion of these common stock shares. Prepare journal entries for each of the following transactions and events.

a. On Monday, Douglas buys back 2,500 shares for $35 per share.

b. On Tuesday, Douglas reissues 1,000 shares of treasury stock for $37 per share.

c. On Wednesday, Douglas reissues 500 shares of treasury stock for $34 per share.

d. On Thursday, Douglas reissues 600 shares of treasury stock for $28.

e. On Friday, the board of directors declares a cash dividend of $1.00 per share.

Expert Solution

Number	Journal Entries	Debit	Credit
a	Share Capital Account	2,500.00
	Additional Paid in Capital Account	42,500.00
	General Reserve/Retained Profit Account	42,500.00
	Cash/Bank Account		87,500.00
	(Buys back 2,500 shares for $35 per share, where the par value is $1 and share premium per share is $ 17)


b	Cash/Bank Account	37,000.00
	Treasury Stock Account		37,000.00
	Reissues 1,000 shares of treasury stock for $37 per share.


c	Cash/Bank Account	17,000.00
	Treasury Stock Account		17,000.00
	Reissues 500 shares of treasury stock for $34 per share.

d	Cash/Bank Account	16,800.00
	Treasury Stock Account		16,800.00
	Reissues 600 shares of treasury stock for $28

e	Dividend Account	30,500.00
	Dividend Payable Account
	Declares a cash dividend of $1.00 per share (30500 Shares @ $ 1)		30,500.00




	Working -J/E (a)	Number of Shares	Per Share	Total Amount
	Cash/Bank Account	2500	35	87,500.00
	Additional Paid in Capital Account	2500	-17	(42,500.00)
	Share Capital Account	2500	-1	(2,500.00)
	General Reserve/Retained Profit Account	2500	17	42,500.00

ekkarill92 answered 2 years ago

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