On October 10, the stockholders' equity of Sherman Systems appears as follows.

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On October 10, the stockholders' equity of Sherman Systems appears as follows.

Common stock-$10 par value, 92,000 shares authorized, issued, and outstanding $ 920,000

Paid-in capital in excess of par value, common stock 316,000

Retained earnings 1,024

Total stockholders' equity, eee $ 2, 260,000

1. Prepare journal entries to record the following transactions for Sherman Systems.

a. Purchased 7,000 shares of its own common stock at $45 per share on October 11

b. Sold 1,500 treasury shares on November 1 for $51 cash per share.

c. Sold all remaining treasury shares on November 25 for $40 cash per share.

2. Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase

business accounting

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Answer 1

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Answer #1

Balance Sheet (partial)
Common Stock $10 par	920,000
Paid-in capital in excess of par value, common stock	316,000
total contributed capital	1,236,000
Retained earnings	1,024,000
total	2,260,000
Less:cost of treasury stock	-315,000
Total stockholders' equity	1,945,000

working:

Oct-11	Treasury Stock, Common(7000*45)	315,000
	Cash		315,000

Nov-01	Cash(1500*51)	76,500
	Treasury Stock, Common(1500*45)		67,500
	Paid in capital, Treasury Stock		9,000

Nov-25	Cash((7000-1500)*40)	137,500
	Paid in capital, Treasury Stock	9,000
	Retained Earnings	101,000
	Treasury Stock, Common(5500*45)		247,500

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Answer 2

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On October 10, the stockholders' equity of Sherman Systems appears as follows.

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