Swifty Corporation had the following stockholders’ equity accounts on January 1, 2019: Common Stock ($4 par)...

Swifty Corporation had the following stockholders’ equity accounts on January 1, 2019: Common Stock ($4 par) $404,600, Paid-in Capital in Excess of Par—Common Stock $212,680, and Retained Earnings $109,060. In 2019, the company had the following treasury stock transactions.

Mar.	1	Purchased 6,650 shares at $9 per share.
June	1	Sold 1,400 shares at $12 per share.
Sept.	1	Sold 1,020 shares at $11 per share.
Dec.	1	Sold 1,330 shares at $6 per share.

Swifty Corporation uses the cost method of accounting for treasury stock. In 2019, the company reported net income of $34,950.

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Expert Solution

Journal Entries:

Date	Particulars	Debit ($)	Credit ($)
Mar 1	Treasury Stock ($4)	26,600
	Paid in Capital in excess of par ($5)	33,250
	Cash ($9)		59,850

Jun 1	Cash ($12)	16,800
	Treasury Stock ($4)		5,600
	Paid in Capital in excess of par ($8)		11,200

Sep 1	Cash ($11)	15,400
	Treasury Stock ($4)		4,080
	Paid in Capital in excess of par ($7)		7,140

Dec 1	Cash ($6)	7,980
	Treasury Stock ($4)		5,320
	Paid in Capital in excess of par ($2)		2,660

Summary of Shareholders' Equity:

Particulars	($)	($)
Common Stock:
Beginning Balance	404,600
Less: Treasury Stock [26,600-5,600-4,080-5,320]	(11,600)
		393,000
Paid in Capital in Excess of Par - Common Stock:
Beginning Balance	212,680
Less: Adjustments during the year	(12,250)
		200,430
Retained Earnings:
Beginning Balance	109,060
Add: Net Income	34,950
		144,010
Total Shareholders' Equity		737,440

ekkarill92 answered 1 year ago

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