Question

In: Accounting

On April 2 a corporation purchased for cash 5,000 shares of its own $12 par common...


On April 2 a corporation purchased for cash 5,000 shares of its own $12 par common stock at $29 per share. It sold 3,000 of the treasury shares at $32 per share on June 10. The remaining 2000 shares were sold on November 10 for $25 per share.

a. Journalize the entries to record the purchase (treasury stock is recorded at cost).

Apr. 2

b. Journalize the entries to record the sale of the stock. If an amount box does not require an entry, leave it blank.

Jun. 10
Nov. 10

Solutions

Expert Solution

  • All working forms part of the answer
  • Requirement ‘a’

Date

Accounts title

Debit

Credit

Working

Apr-02

Treasury Stock

$                                 145,000.00

[5,000 shares x $ 29 per share]

   Cash

$                145,000.00

[5,000 shares x $ 29 per share]

(Own shares purchased as Treasury Stock)

  • Requirement ‘b’

Date

Accounts title

Debit

Credit

Working

Jun-10

Cash

$                                   96,000.00

[3,000 shares x $ 32 per share]

Treasury Stock

$                  87,000.00

[3,000 shares x $ 29 per share cost]

Paid In Capital - Treasury Stock

$                     9,000.00

[3,000 shares x $ 3 (32-29)]

(Shares re - issued)

Nov-10

Cash

$                                   50,000.00

[2,000 shares x $ 25 per share]

Paid In Capital - Treasury Stock

$                                     8,000.00

[2,000 shares x $ 4 (29-25)]

Treasury Stock

$                  58,000.00

[2,000 shares x $ 29 per share cost]

(Shares re - issued)


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