Question

Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 19,200 shares of its common stock at $19 per share. On June 14, 13,600 of the reacquired shares were sold at $24 per share, and on November 23, 4,100 of the reacquired shares were sold at $20.

Required:

A.	Journalize the transactions of January 31, June 14, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B.	What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C.	What is the balance in Treasury Stock on December 31 of the current year?
D.	How will the balance in Treasury Stock be reported on the balance sheet? CHART OF ACCOUNTSLawn Spray Inc.General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Stock Dividends Distributable 351 Cash Dividends 352 Stock Dividends 390 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense

Answer 1

Part 1 --- Journal Entries

Date	General Journal	Debit	Credit
Jan.31	Treasury Stock (19,200 Shares x Cost $19)	$364,800
	Cash		364800
June.14	Cash (13,600 Shares x $24)	$326,400
	Treasury Stock (13,600 shares @ Cost $19)		$258,400
	Additional Paid in Capital from Treasury Stock (bal. fig)		$68,000
Dec.31	Cash (4,100 Shares x $20)	$82,000
	Treasury Stock (4,100 shares @ Cost $19)		$77,900
	Additional Paid in Capital from Treasury Stock (bal. fig)		$4,100

Part B – For this part I need full detailed question. Please confirm is there any other data given ?

Part C – Balance in Treasury stock on Dec 31 = (19,200 Shares – 13,600 Shares – 4,100 Shares) @ Cost $19

= 1,500 Shares * $19

= $28,500

Part d --- Under Cost method of Treasury Stock, the cost of treasury stock is reported at the end of the stockholder’s equity section of the balance sheet.

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