Question

Treasury Stock Transactions Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 9,500 shares of its common stock at $38 per share On June 14, 6,000 of the reacquired shares were sold at $40 per share, and on November 23, 2.300 of the reacquired shares were sold at $41. a. Journalize the transactions of January 31, June 14, and November 23. For a compound transaction, if an amount box does not require an entry, leave it blank Jan. 31 June. 14 Nov. 23 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

Journal entry

date	General Journal	Debit	Credit
Jan 31	Treasury Stock (9500*38)	361000
	Cash		361000
June 14	Cash (6000*40)	240000
	Treasury stock (6000*38)		228000
	Paid in capital from sale of treasury stock		12000
Nov 23	Cash (2300*41)	94300
	Treasury stock (2300*38)		87400
	Paid in capital from sale of treasury stock		6900

b) Paid in capital from sale of treasury stock = 18900 Credit balance

c) Balance in treasury stock = 1200*38 = 45600 Debit balance

d) Deduct from total Stockholder's equity