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Problem 15-2 Pronghorn Company had the following stockholders’ equity as of January 1, 2017. Common stock,...
Problem 15-2 Pronghorn Company had the following stockholders’ equity as of January 1, 2017. Common stock, $5 par value, 21,000 shares issued $105,000 Paid-in capital in excess of par—common stock 297,000 Retained earnings 316,000 Total stockholders’ equity $718,000 During 2017, the following transactions occurred. Feb. 1 Pronghorn repurchased 1,960 shares of treasury stock at a price of $17 per share. Mar. 1 750 shares of treasury stock repurchased above were reissued at $15 per share. Mar. 18 510 shares of treasury stock repurchased above were reissued at $13 per share. Apr. 22 560 shares of treasury stock repurchased above were reissued at $18 per share. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Pronghorn uses the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 1 Mar. 18 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,300. (Enter account name only and do not provide descriptive information.) PRONGHORN COMPANY Stockholders’ Equity $ : $
Solutions
Expert Solution
Prepare the journal entries to record the treasury stock transactions in 2017, assuming Pronghorn uses the cost method
| Date | account and explanation | debit | credit |
| Feb 1 | Treasury Stock (1960*17) | 33320 | |
| Cash | 33320 | ||
| (To record treasury stock purchased) | |||
| Mar 1 | Cash (750*15) | 11250 | |
| Retained earnings (750*2) | 1500 | ||
| Treasury Stock (750*17) | 12750 | ||
| (To record treasury stock reissued) | |||
| Mar 18 | Cash (510*13) | 6630 | |
| Retained earnings (510*4) | 2040 | ||
| Treasury Stock (510*17) | 8670 | ||
| (To record treasury stock sold) | |||
| Apr 22 | Cash (560*18) | 10080 | |
| Treasury Stock (560*17) | 9520 | ||
| Paid in capital from sale of treasury Stock | 560 | ||
| (To record sale of treasury stock) | |||
Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,300.
| Paid in capital | ||
| Common Stock | 105000 | |
| Paid-in capital in excess of par—common stock | 297000 | |
| Paid in capital from sale of treasury Stock | 560 | |
| Total Paid in capital | 402560 | |
| Retained earnings (316000+130300-2040-1500) | 442760 | |
| Total | 845320 | |
| Less; Treasury Stock (140*17) | -2380 | |
| Total Stockholder's equity | 842940 | |
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