Question

Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 2,700 shares of its common stock at $59 per share. On September 6, Biscayne Bay Water Inc. sold 2,200 of the reacquired shares at $62 per share. The remaining 500 shares were sold at $55 per share on November 30. a. Journalize the transactions of May 14, September 6, and November 30. For a compound transaction, if an amount box does not require an entry, leave it blank. May 14 Sept. 6 — Nov. 30 b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? C. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?

Answer 1

Parta: Journal entries in the books Biscayne Bay water Inc: Credit Date May 14 General Journal Account Title Treasury Stock, Common (2.700*$59) Cash Debit $159,300 $159,300 Sep 6 $136,400 Cash (2.200*$62) Treasury Stock, Common (2.200*$59) Paid in capital, Treasury Stock [2.200*(S62 -$59)] $129.800 $6,600 Nov. 30 Cash (500*$55) Paid in capital, Treasury Stock [500*($59-$55)] Treasury Stock, Common (2,200*$59) $27,500 $2.000 $29,500 Part b: i) ii) iii) Paid in capital from sale of treasury stock on Sep 6 Paid in capital from sale of treasury stock on Nov 30 Balance in paid in capital from sale of treasury stock $6.600 credit $2.000 debit $4,600 credit Balance in paid in capital from sale of treasury stock on December 31 is $4,600 credit

Partc: Balance in paid in capital from sale of treasury stock should be shown in stockholders equity section of balance sheet