Question

On January 1, 2017, Fascom had the following account balances in its shareholders' equity accounts.

Common stock, $1 par, 250,000 shares issued	250,000
Paid-in capital–excess of par, common	500,000
Paid-in capital–excess of par, preferred	100,000
Preferred stock, $100 par, 10,000 shares issued	1,000,000
Retained earnings	2,000,000
Treasury stock, at cost, 5,000 shares	25,000

During 2017, Fascom Inc. had several transactions relating to common stock.

January 15:	Bought for retirement 10,000 common shares at $ 5 per share.
February 17:	Sold 1,000 share of the treasury shares at $7 per share.
April 10:	Reissued 4,000 of the retired shares (of January 8th) at $8 per share.

Required:

a. Journalise the above transactions by copying (control C) the below table and pasting (control V) into your answer.

b. What will the Retained Earnings account balance be after taking the above transactions into regard?

Answer 1

a.

Date	Account Titles	Debit	Credit
Jan. 15	Common Stock	$           10,000
	Paid-in capital–excess of par, common	$           20,000
	Retained Earnings	$           20,000
	Cash		$          50,000
Feb. 17	Cash	$             7,000
	Treasury Stock		$            5,000
	Paid in Capital from Treasury stock		$            2,000
Apr. 10	Cash	$           32,000
	Common Stock		$            4,000
	Paid-in capital–excess of par, common		$          28,000

b. Retained Earnings Account Balance = $2000000-20000 = $1,980,000