Question

1 More Info Dec. 1Purchased 1,700 shares of the company's $1 par value common stock as treasury stock, paying cash of $7 per share. 15 Sold 700 shares of the treasury stock for cash of $10 per share. 20 Sold 800 shares of the treasury stock for cash of $3 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,600.)

Answer 1

Requirement 1:

Date	Account title and Explanation	Debit	Credit
Dec.1	Treasury stock [1,700 x $7 cost]	$11,900
	Cash		$11,900
	[To record purchase of own shares]
Dec.15	Cash [700 x $10]	$7,000
	Treasury stock [700 x $7 cost]		$4,900
	Paid-in capital in excess from treasury stock		$2,100
	[To record sale of treasury stock]
Dec.20	Cash [800 x $3]	$2,400
	Paid-in capital in excess from treasury stock	$2,600
	Retained earnings	$600
	Treasury stock [800 x $7 cost]		$5,600
	[To record sale of treasury stock]

Requirement 2:

Discount World Furniture, Inc. will report treasury stock beneath retained earnings on the balance sheet as a reduction to total stockholders' equity