California Surf Clothing Company issues 1,400 shares of $2 par value common stoc

Question

California Surf Clothing Company issues 1,400 shares of $2 par value common stock at $28 per share. Later in the year, the company decides to repurchase 160 shares at a cost of $49 per share.

1. Record the transaction if California Surf reissues the 160 shares of treasury stock at $52 per share. (If no entry is required for an event, select "No journal entry required" in the first account field.)

Additional paid-in capital:

2. How would the entry be different if the shares reissue at $38 per share rather than at $52 per share? (If no entry is required for an event, select "No journal entry required" in the first account field.)

California Surf Clothing Company issues 1,400 shares of $2 par value common stock at $28 per share. Later in the year, the company decides to repurchase 160 shares at a cost of $49 per share.

1. Record the transaction if California Surf reissues the 160 shares of treasury stock at $52 per share. (If no entry is required for an event, select "No journal entry required" in the first account field.)

Cash: Treasury stock:

Additional paid-in capital:

2. How would the entry be different if the shares reissue at $38 per share rather than at $52 per share? (If no entry is required for an event, select "No journal entry required" in the first account field.)

Cash Additional paid-in capital Treasury stock

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Part 1:

Cash (160*52) Dr. 8320

Treasury Stock (160*49) Cr. 7840

Additional Paid in Capital (8320 - 7840) Cr. 480

Part 2:

Cash (160*38) Dr. 6080

Additional Paid in Capital (7840 -6080) Cr. 1760

Treasury Stock (160*49) Cr. 7840

Thanks.

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