ElectricCity Corporation designs, manufactures, and markets mobile communication

Question

ElectricCity Corporation designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players. In 2014, ElectricCity Corporation had the largest market value of any company. ElectricCity Corporation has over 92,000 full-time employees. The company's statement of cash flows contained the following information (in millions):

3.

value:
1.00 points

Required information

Required:

1. Prepare the journal entry to record the purchase of treasury stock in 2014. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

References

eBook & Resources

General JournalLearning Objective: 11-03 Describe the characteristics of common stock and report common stock transactions.

Difficulty: 3 HardLearning Objective: 11-08 Discuss the impact of stock transactions on cash flows.

4.

value:
1.00 points

Required information

2. Record the sale of treasury stock. Assume the stock had been purchased at a cost of $10.2 million and the company sold the stock for $12.4 million.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)

2014 2013 2012 Cash flows from financing activities: Repurchases of common stock (138.5 ) (412.0 ) 0

Explanation / Answer

Journal entry :

Transaction Accounts & explanation debit credit 1 Treasury stock a/c 138.50       Cash a/c 138.50 (To record purchase of treasury stock) 2 Cash a/c 12.40      Treasury stock a/c 10.20      Paid in capital from sale of treasury stock 2.20 (To record sale of treasury stock)

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