Question

Treasury Stock Transactions Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water reacquired 2,500 shares of its common stock at $66 per share. On September 6, Biscayne Bay Water sold 1,900 of the reacquired shares at $69 per share. The remaining 600 shares were sold at $62 per share on November 30. a. Journalize the transactions of May 14, September 6, and November 30. If an amount box does not require an entry, leave it blank. Treasury Stock May 14 Cash Cash Sept. 6 Treasury Stock Paid-in Capital from Sale of Treasury Stock Nov. 30 Cash Paid-in Capital from Sale of Treasury Stock Treasury Stock Feedback Check My Work b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? $ Credit c. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet? Stockholders' Equity section d. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock? All of these reasons.

Answer 1

a
May 14	Treasury Stock	165000		=2500*66
	Cash		165000
Sept 6	Cash	131100		=1900*69
	Treasury Stock		125400	=1900*66
	Paid in Capital from sale of Treasury Stock		5700
Nov 30	Cash	37200		=600*62
	Paid in Capital from sale of Treasury Stock	2400
	Treasury Stock		39600	=600*66
b
	Paid in Capital from sale of Treasury Stock	3300	Credit	=5700-2400