Question

Problem 11-2A

Fechter Corporation had the following stockholders’ equity accounts on January 1, 2015: Common Stock ($4 par) $431,680, Paid-in Capital in Excess of Par—Common Stock $223,430, and Retained Earnings $119,370. In 2015, the company had the following treasury stock transactions.

Mar. 1 Purchased 6,770 shares at $8 per share.

June 1 Sold 1,230 shares at $12 per share.

Sept. 1 Sold 1,370 shares at $10 per share.

Dec. 1 Sold 1,160 shares at $6 per share.

Fechter Corporation uses the cost method of accounting for treasury stock. In 2015, the company reported net income of $27,060.

Prepare the stockholders’ equity section for Fechter Corporation at December 31, 2015.

List of accounts:

Accounts Payable
Accounts Receivable
Accumulated Depreciation-Buildings
Accumulated Depreciation-Equipment
Allowance for Doubtful Accounts
Bad Debts Expense
Buildings
Cash
Cash Dividends
Common Stock
Common Stock Dividends Distributable
Cost of Goods Sold
Depreciation Expense
Dividends Payable
Equipment
Income Summary
Interest Expense
Interest Payable
Land
No Entry
Operating Expenses
Organization Expense
Other Operating Expenses
Paid-in Capital from Treasury Stock
Paid-in Capital in Excess of Par-Common Stock
Paid-in Capital in Excess of Par-Preferred Stock
Paid-in Capital in Excess of Stated Value-Common Stock
Patents
Preferred Stock
Retained Earnings
Salaries and Wages Expense
Salaries and Wages Payable
Sales Revenue
Service Revenue
Stock Dividends
Supplies
Supplies Expense
Treasury Stock
Unearned Service Revenue

Answer 1

Date	Account titles and Explanations				Debit	Credit
1-Mar	Treasury stock				54160
	cash					54,160
	(6770*8)
1-Jun	cash		(1230*12)		14760
	Treausry stock		(1230*8)			9840
	Paid in capital from-TS					4920
1-Sep	cash		(1370*10)		13700
	Treausry stock		(1370*8)			10960
	Paid in capital from -TS					2740
1-Dec	Cash		(1160*6)		6,960
	paid in capital from-TS				2,320
	Treasury stock					9,280
	Paid in capital from Treasury stock
	Date		Debit	Credit	Balance
	1-Jun			4,920	4,920
	1-Sep			2,740	7,660
	1-Dec		2,320		5,340
	Treasury stock
	Date		Debit	Credit	Balance
	1-Mar		54,160		54,160
	1-Jun			9,840	44,320
	1-Sep			10,960	33,360
	1-Dec			9,280	24,080
	Retained earnings
	Date		Debit	Credit	Balance
	1-Jan	balance			119,370
	31-Dec			27,060	146,430
		Balance Sheet
		As on December 31,2017
	Shareholders Equity
	paid in capital
	Capital Stock
	Common shares					431,680
	Addittional paid in capital
	paid in capital in excess of par				223,430
	paid in capital from treasury stock				5,340
	total Addittional paid in capital					228,770
	total paid in capital					660,450
	Add retained earnings					146,430
	total paid in capital & retained earnings					806,880
	less Treasury stock					-24,080
	stockholders Equity					782,800