Ellison Company\'s balance sheet shows: Common stock, $20 par $3,000,000 Paid-in
ID: 2424157 • Letter: E
Question
Ellison Company's balance sheet shows:
Common stock, $20 par $3,000,000
Paid-in capital in excess of par 1,050,000
Retained earnings 750,000
Instructions
Record the following transactions by the cost method.
(a) Bought 8,000 shares of its common stock at $29 a share.
(b) Sold 4,000 treasury shares at $30 a share.
(c) Sold 2,000 shares of treasury stock at $26 a share.
Explanation / Answer
Solution:
(a) Tresury stock ..................232000
To cash.......................................................232000
(b) Cash...............................120000
To treasury stock........................................116000
To paid in capital from treasury stock............4000
(c) Cash...............................52000
Paid in capital from treasury stock4000
Retained earnings......................2000
To treasury stock.......................................58000
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