In: Accounting
Part B
During 2018, the Nicklaus Corporation participated in three
treasury stock transactions:
On June 30, 2018, the corporation reacquires 160,000 shares for the treasury at a price of $12 per share.
On July 31, 2018, 30,000 treasury shares are reissued at $15 per share.
On September 30, 2018, 30,000 treasury shares are reissued at $10 per share.
Required:
1. Prepare journal entries to record these
transactions.
2. Prepare the Nicklaus Corporation shareholders'
equity section as it would appear in a balance sheet prepared at
September 30, 2018. (Assume net income for the second and third
quarter was $2,800,000.)
Date |
No. of treasury shares |
Cost |
Amount |
Additional Paid In Capital |
30-Jun-18 |
160000 |
$ 12.00 |
$ 19,20,000.00 |
|
31-Jul-18 |
-30000 |
$ 12.00 |
$ (3,60,000.00) |
$ 90,000.00 |
30-Sep-18 |
-30000 |
$ 12.00 |
$ (3,60,000.00) |
$ (60,000.00) |
TOTAL for Balance Sheet |
100000 |
$ 12.00 |
$ 12,00,000.00 |
$ 30,000.00 |
Date |
General Journal |
Debit |
Credit |
30-Jun-18 |
Treasury Stock |
$ 19,20,000.00 |
|
Cash |
$ 19,20,000.00 |
||
31-Jul-18 |
Cash |
$ 4,50,000.00 |
|
Treasury Stock |
$ 3,60,000.00 |
||
Additional Paid In Capital |
$ 90,000.00 |
||
30-Sep-18 |
Cash |
$ 3,00,000.00 |
|
Additional Paid In Capital |
$ 60,000.00 |
||
Treasury Stock |
$ 3,60,000.00 |
Stockholder's Equity |
|
Common Stock |
XXX |
Additional Paid In Capital |
$ 30,000.00 |
Retained Earnings |
$ 28,00,000.00 |
Total |
$ 28,30,000.00 |
Less: Treasury Stock |
$ 12,00,000.00 |
Total Stockholder's Equity |
$ 16,30,000.00 |