Chapter 13 Homework 6 On October 10, the stockhalders\' equity of Sherman System

Question

Chapter 13 Homework 6 On October 10, the stockhalders' equity of Sherman Systems appears as follows: Common stock-$10 par value, 72,000 shares points authorized, Lasued, and outstanding $720,000 216,000 864,000 $1,800,000 Paid-in capital in excese of par value, conson atock Total stockholdera equity 1 Prepare journal entres to record the following transactions for Sherman Systems Print a. Purchased 5,000 shares of its own common stock at $25 per share on October 11. b. Sold 1,000 treasury shares on November 1 for $31 cash per share. References c. Sold all remaining treasury shares on November 25 for $20 cash per share. View transaction Est Journal entry worksheet Record the purchase of 5,000 shares of its own common stock for $25 cash per share. General Journal Debit Credit

Explanation / Answer

Answer 1 Journal entries Transaction General Journal Debit Credit a Treasury Stock $125,000.00 Cash $125,000.00 (to record purchase 5000 shares of its own stock for $25 each) Transaction General Journal Debit Credit b Cash $31,000.00 Treasury Stock $25,000.00 Paid in capital in Excess of par Value,Treasury stock $6,000.00 (to record sale of 1000 shares of treasury stock @ $31 each) Transaction General Journal Debit Credit c Cash $80,000.00 Paid in capital in Excess of par Value,Treasury stock $6,000.00 Retained Earnings $14,000.00 Treasury Stock $100,000.00 (to record sale of 4000 shares of treasury stock @ $20 each) Answer 2 Revised Equity section of Balance sheet after October 11 treasury stock purchase. Common stock - $10 par value , 72000 shares authorised , issued and outstanding $720,000.00 Paid in Capital in excess of par value , Common stock $216,000.00 Retained Earnings $864,000.00 Treasury stock (5000 shares @ $25 each) -$125,000.00 Total Stockholders Equity $1,675,000.00

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