Eile Inc. was incorporated under provindal leg lation with a December 31 year ha

Question

Eile Inc. was incorporated under provindal leg lation with a December 31 year had a book vale of $18,000,000 om the balance sheet. L The company has a single dass of shares. As at December 31, 2016, it had 900,000 shares issued and outstandin?These share ? ? During 2017 EM e repurchased 10% of the l sued shares from one of the minority shareholders at a cost ot S25 per share. The com any held these in treasury and later found , buyer for half of these shares at 530. The other half were sold at S21 to another investor. Required Record the share transactions using the single-transaction method for treasury stock, twhich is the preferred accounting method Accounts titles might be used: Cash, Contributed surplus,Treasury shares ?/? |???? ?? Repurch ??:? Resale ??:?! 2, Resale 2 ??:? ???? 1 ?? (??:?e?,?????“??" )

Explanation / Answer

JE Dr. Cr. 1 Treasury Stock $ 2,250,000.00 [900000 shares*10%*$25] To Cash $ 2,250,000.00 (Being Shares repurchased) 2 Cash A/c $      135,000.00 [90,000 shares*50%*$30] Paid in capital from Treasury Stock $        22,500.00 [90,000 shares*50%*($30-$25)]] Treasury Stock $      112,500.00 [90,000 shares*50%*$25] 3 Cash A/c $        94,500.00 [90,000 shares*50%*$21] Paid in capital from Treasury Stock $        18,000.00 [90,000 shares*50%*($25-$21)]] Treasury Stock $      112,500.00 [90,000 shares*50%*$25]

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