Mad City Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000.

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.

Solutions

Expert Solution

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.

==========================================

Treasury Stock (Dr) $250,000 Cash(Cr) $250,000 (5,000 x $50)

It later resold 2,000 shares for $54 per share --

----------------------------------------------

It later resold 2,000 more shares for $49 per share

Cash(Dr) $98,000 (2,000 x$49 )
----------------------

It finally resold 1,000 shares for $40 per share.

Cash(Dr) $40,000 (1,000 x40 )

Amanda K answered 2 years ago

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