On Jan 1, 2014, the stockholders\' equity section shows common stock (%5 par val

Question

On Jan 1, 2014, the stockholders' equity section shows common stock (%5 par value) $1,500,000; paid in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the following treasury stock transactions occured. Mar 1. Purchased 50,000 shares for cash at $15 per share. Jul 1. Sold 10,000 tresury shares for cash at $17 per share. Sept 1. Sold 8,000 treasury shares for cash at $14 per share. 1. Please journalize the treasury stock transactions. 2. Restate the entry for Sept 1, assuming the treasury shares were sold at $12 per share.

Explanation / Answer

Hi,

Please find the answer as follows:

Mar 1

Treasury Stock (50000*15) Dr. 750000

Cash Cr. 750000

Jul 1

Cash (50000*17) Dr. 850000

Treasury Stock Cr. 750000

Additional Paid in Capital (50000*2) Cr. 100000

Sep 1

Cash (8000*14) Dr. 112000

Additional Paid in Capital (8000*1) Cr. 8000

Treasury Stock Cr. 120000

Sept 1 - Revised

Cash (8000*12) Dr. 96000

Additional Paid in Capital (8000*3) Cr. 24000

Treasury Stock Cr. 120000

Thanks.

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