Question

Treasury Stock Transactions SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 13,100 shares of its common stock at $24 per share. On June 9, 8,300 of the reacquired shares were sold at $25 per share, and on November 13, 3,100 of the reacquired shares were sold at $27. a. Journalize the transactions of March 9, June 9, and November 13. If an amount box does not require an entry, leave it blank. Mar. 9 June 9 Nov. 13 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?

Answer 1

Credit Requirement (a) Date Accounts Title and Explaination Mar-09 Treasury Stock Cash Debit $ 314,400.00 13100*24 $ 314,400.00 (To Record reacquired common stock) $207,500.00 8300*25 Jun-09 Cash Treasury Stock Paid in capital from sale of treasury stock $ 199,200.00 $ 8,300.00 8300*24 8300*(25-24) (To Record sale reacquired common stock) $ 83,700.00 3100*27 Nov-13 Cash Treasury Stock Paid in capital from sale of treasury stock $ 74,400.00 $ 9,300.00 3100*24 3100*(27-24) (To Record sale reacquired common stock) Requirement (b) Balance in Paid in capital from sale of treasury stock on Dec 31 ($8300+$9300) $ 17,600.00 Requirement (C.) Balance in treasury stock on Dec 31 (13100-8300-3100)*$24 $ 40,800.00 Requirement (d.) Balance in Treasury stock is reported as deduction from Total of paid in capital and Retained earnings