E11-8 Recording Treasury Stock Transactions and Analyzing Their Impact [LO 11-2,

Question

E11-8 Recording Treasury Stock Transactions and Analyzing Their Impact [LO 11-2, LO 11-3] IThe following information applies to the questions displayed below The following selected transactions occurred for Corner Corporation. Feb. 1 Purchesed 590 shares of the company's own common stock at $39 cash per share, the stock is July 15 Issued 195 of the shares purchased on February 1 for $19 cash per share now held in treasury Sept 1 Issued 155 more of the shares purchased on February 1 for $34 cash per share. References Section Break E11-8 Recording Treasury Stock Transactions and Analyzing Their Impact LO 11-2, LO 11-3 value. 0.37 points Required in E11-8 Part 1 Required: 1. Indicating the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account balances with a minus sign.) Assets Liabilities Stockholders Equity Feb 1 July 15 Sept. 1

Explanation / Answer

ANSWER =1) Date Assets Amount "=" Liabilities Amount "+" Shareholder's Equity Amount Feb, 01 Cash Paid for Purchase -23010 "=" 0 "+" Treasurry Stock -23010 July , 15 Cash Received on Re-Issue of Shares 9555 "=" 0 "+" Treasurry Stock 9555 Sept, 01 Cash Received on Re-Issue of Shares 5270 "=" 0 "+" Treasurry Stock 5270 ANSWER =3) Dividend are not paid on Treasurry Stock therefore , Total Amount of Dividend paid is less when treasurry stock is purchased Answer = 4) The Reissuance of treasurry stock for more or less than its original repurchase cost have no affect on net income . The transaction effects only Sahreholder's Equity and Retained earning accounts

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