In: Other
Mad City Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000. It later resold 2,000 shares for $54 per share, then2,000 more shares for $49 per share, and finally 1,000 shares for $40 per share.
Prepare journal entries for the purchase of the treasury stock and the three sales of treasury stock.
Mad City Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000.
It later resold 2,000 shares for $54 per share,
then 2,000 more shares for $49 per share,
and finally 1,000 shares for $40 per share.
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Treasury Stock (Dr) $250,000 Cash(Cr) $250,000 (5,000 x $50)
It later resold 2,000 shares for $54 per share --
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It later resold 2,000 more shares for $49 per share
Cash(Dr) $98,000 (2,000 x$49 )
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It finally resold 1,000 shares for $40 per share.
Cash(Dr) $40,000 (1,000 x40 )