Question

In: Accounting

On January 1, 2020, the stockholders’ equity section of Bramble Corp. shows common stock ($6 par...

On January 1, 2020, the stockholders’ equity section of Bramble Corp. shows common stock ($6 par value) $1,800,000; paid-in capital in excess of par $1,100,000; and retained earnings $1,170,000. During the year, the following treasury stock transactions occurred.

Mar. 1 Purchased 52,000 shares for cash at $15 per share.
July 1 Sold 12,000 treasury shares for cash at $17 per share.
Sept.   1 Sold 10,000 treasury shares for cash at $14 per share.

(a)

  • Your Answer
  • Correct Answer (Used)

Journalize the treasury stock transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit
                                              July 1Mar. 1Sept. 1
                                              Sept. 1Mar. 1July 1
                                              Sept. 1July 1Mar. 1

(b)

Restate the entry for September 1, assuming the treasury shares were sold at $12 per share. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date

Account Titles and Explanation

Debit

Credit
                                                                      Sept. 1July 1Mar. 1

Solutions

Expert Solution

a.

Journal Entries
Date Account Title and Explanation Debit Credit
01-Mar Treasury Stock Dr (52000*$15) $7,80,000
       To Cash $7,80,000
(To record purchase of Treasury stock)
01-Jul Cash Dr (12000*$17) $2,04,000
      To Treasury Stock (12000*$15) $1,80,000
      To Paid in capital from treasury stock $24,000
(To record sales of 12000 treasury shares)
01-Sep Cash Dr (10000*$14) $1,40,000
Paid in capital from treasury stock Dr $10,000
      To Treasury Stock (10000*$15) $1,50,000
(To record sales of 10000 treasury shares)

b.

01-Sep Cash Dr (10000*$12) $1,20,000
Paid in capital from treasury stock Dr (available from July 1) $24,000
Retained earnings (Bal. fig.) $6,000
      To Treasury Stock (10000*$15) $1,50,000
(To record sales of 10000 treasury shares)

ekkarill92 answered 1 year ago
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