Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance an

Question

Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 19,600 shares of its common stock at $19 per share. On June 14, 13,700 of the reacquired shares were sold at $25 per share, and on November 23, 4,700 of the reacquired shares were sold at $20.

Required:

A. Journalize the transactions of January 31, June 14, and November 23. Refer to the Chart of Accounts for exact wording of account titles. B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? C. What is the balance in Treasury Stock on December 31 of the current year? D. How will the balance in Treasury Stock be reported on the balance sheet?

Explanation / Answer

SOLUTION

(A)

(B) Balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year-

= $82,200 + $4,700 = $86,900

(C) Balance in Treasury Stock on December 31 of the current year-

= $372,400 - $260,300 - $89,300

= $22,800

(D) Treasury stock will be reported as the last item in the Stockholders' Equity section, as a deduction from the subtotal of items above it.

Date Accounts title and Explanations Debit ($) Credit ($) Jan.31 Treasury Stock (19,600 shares * $19) 372,400 Cash 372,400 June 14 Cash (13,700 * $25) 342,500 Treasury stock (13,700 * $19) 260,300 Paid-In Capital from Sale of Treasury Stock 82,200 Nov. 23 Cash (4,700 * $20) 94,000 Treasury Stock  (4,700 * $19) 89,300 Paid-In Capital from Sale of Treasury Stock 4,700

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.