Question

Fechter Corporation had the following stockholders’ equity accounts on January 1, 2017: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par—Common Stock $200,000, and Retained Earnings $100,000. In 2017, the company had the following treasury stock transactions.

Mar.	1		Purchased 5,000 shares at $8 per share.
June	1		Sold 1,000 shares at $12 per share.
Sept.	1		Sold 2,000 shares at $10 per share.
Dec.	1		Sold 1,000 shares at $7 per share.

Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $30,000.

B. Open accounts for (1) Pain-in Capital from Treasury Stock, (2) Treasury Stock, and (3) Retained Earnings. Post to these accounts using J10 as the posting reference. (B- Treasury STock should be $8,000).

Answer 1

0 1 solution 2 Date 3 Mar 1 Treasury Stock -5000 8 accont title debit credit aid-in Capital from Treasury Stock Date Jun 1 Sep 1 Dec 1 Ref. Debit Credit Balance 110 J10 10 1,000 40,000 Cash 40,000 4,000 4,000 8, 4,000 8,000 7,000 Jun 1 Cash 1000 12 12,000 Treasury Stock-1000 8 Paid-in Capital from Treasu 8,000 4,000 Treasury Stock Date Mar 1 Jun 1 Sep 1 Dec 1 Ref. Debit CreditBalance 40,000 8,000 32,000 16,00016,000 8,000 10 Sep 1 Cash 2000*10 20,000 10 40,000 10 10 U10 Treasury Stock -2000 8 Paid-in Capital from Treasury 16,000 4,000 12 13 14 Dec 1 Cash 1000*7 8,0008 7,000 Paid-in Capital from Treasury 1,000 Treasury Stock 1000 8 Retained earnin Ref. Debit Credit Balance 100,000 100,000 30,000 130,000 8,000 Date 17 18 19 Dec 31 Income Summar 30,000 Dec 31 U10 Retained Earnings 30,000 21 23 25 2б :4 ▶ H (.. Sheet1 764 Sheet1 765 Sheet1 766 Sheet1 767 Sheet1 768 Sheet1 769 Sheet1 770 Sheet1 771/ .ENG 23:22 US 08/09/2017