On October 10, the stockholders\' equity of Sherman Systems appears as follows.

Question

On October 10, the stockholders' equity of Sherman Systems appears as follows. Common stock-$10 par value 77,000 shares 6 nts authorized, issued, and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders1 equity s770,000 241,000 904,000 $1,915,000 eBook Print eferences 1. Prepare journal entries to record the following transactions for Sherman Systems a. Purchased 5,500 shares of its own common stock at $30 per share on October 11. b. Sold 1,125 treasury shares on November 1 for $36 cash per share. e Sold all remaining treasury shares on November 25 for $25 cash per share. View transaction list Journal entry worksheet 2 3 Record the purchase of 5,500 shares of its own common stock for $30 cash per share

Explanation / Answer

7) Journal entry :

Date account and explanation debit credit Oct 11 Treasury stock (5500*30) 165000 Cash 165000 (To record purchase of treasury stock) Nov 1 Cash (1125*36) 40500 Treasury stock (1125*30) 33750 Paid in capital from sale of treasury stock 6750 (To record sale of treasury stock) Nov 25 Cash (4375*25) 109375 Paid in capital from sale of treasury stock 6750 Retained earnings 15125 Treasury stock (4375*30) 131250 (To record sale of treasury stock)

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