Question

Brief Exercise 10-43 (Algorithmic) Accounting for Treasury Stock On August 19, 2019, Portland Corporation repurchases 8,900 shares of its outstanding common stock for $16 per share. On October 31, 2019, Portland sells 4,450 shares of treasury stock for $20 per share. Any additional sales of treasury stock during the year were sold for $11 per share. On December 31, 2019, Portland had no remaining treasury stock. Required: Prepare the necessary journal entries to record any transactions associated with treasury stock. 2019 Aug. 19 Treasury Stock Cash Oct. 31 Cash Treasury Stock Additional Paid-In Capital-Treasury Stock Nov. 17 Cash Additional Paid-In Capital-Treasury Stock Retained Earnings Treasury Stock

Answer 1

Journal Entries Account Title and Explanation Credit Debit Date $ 142,400 19-08-2019 Treasury Stock (8,900 shares $16) $ 142,400 Cash (4,450 shares $20) $ 31-10-2019 Cash 89,000 71,200 (4,450 shares $16) $ Treasury Stock Additonal Paid-In Capital-Treasury Stock $ 17,800 (4,450 shares $4) (4,450 shares $11) to the extent credited in second entry (refer workings below) $ 17-11-2019 Cash 48,950 Additonal Paid-In Capital-Treasury Stock Retained Earnings $ 17,800 4,450 $ Treasury Stock 71,200 Additional sale of treasury stock 4,450 (8,900 shares 4,450 shares) - Debit to Retained Earnings 71,200 (4,450 shares $16) 48,950 (4,450 shares $11) $ Purchase cost Less: Sale value Less: Amount credited to Additional Paid-In Capital-Treasury Stock 17,800 Amount to be debited to Retained Earnings 4,450