Treasury Stock Transactions Beaverhead Creek Inc. bottles and distributes spring

Question

Treasury Stock Transactions

Beaverhead Creek Inc. bottles and distributes spring water. On April 27 of the current year, Beaverhead Creek reacquired 4,500 shares of its common stock at $84 per share. On July 13, Beaverhead Creek sold 3,200 of the reacquired shares at $91 per share. The remaining 1,300 shares were sold at $79 per share on October 8.

a. Journalize the transactions of April 27, July 13, and October 8. For a compound transaction, if an amount box does not require an entry, leave it blank.

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
$

c. For what reasons might Beaverhead Creek have purchased the treasury stock?

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a. Journalize the transactions of April 27, July 13, and October 8. For a compound transaction, if an amount box does not require an entry, leave it blank.

Apr. 27






July 13





Oct. 8

Explanation / Answer

a1. Journalize the transaction of april 27
DR Treasury Stock 378,000
CR Cash 378,000

a2. Journalize the transaction of july 13
DR Cash 291,200
CR Treasury Stock 268,800
CR Additional Paid-In Capital - Treasury Stock 22,400

a3. Journalize the transaction of october 8.
DR Cash 102,700
CR Treasury Stock 109,200
DR Additional Paid-In Capital - Treasury Stock 6,500


b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
$15,900

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