Question

CALCULATOR FULL SCREEN PRINTER VERSION « BACK N Problem 11-2A Fechter Corporation had the following stockholders' equity accounts on January 1, 2015: Common Stock ($5 par) $505,300, Paid-in Capital in Excess of Par-- Common Stock $189,930, and Retained Earnings $115,850. In 2015, the company had the following treasury stock transactions. Mar. 1 Purchased 6,290 shares at $8 per share. June 1 Sold 1,360 shares at $13 per share. Sept.1 Sold 1,130 shares at $11 per share. Dec. 1 Sold 1,130 shares at $6 per share. Fechter Corporation uses the cost method of accounting for treasury stock. In 2015, the company reported net income of $29,030. Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2015, for net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter o for the amounts.) Date Account Tities and Explanation Debit Mar. 1 Credit June 1 Sept. 1 acy Policy. I 2000-2020 John Wiley & Sons, Inc. All Rights Reserved the

Answer 1

Answer to Question 1:

Date	Account Title & Explanation	Debit($)	Credit($)
March1	Treasury Stock A/c	50,320
	To, Cash		50,320
	(Being 6290 shares purchased @ $8 )
June 1	Cash A/c	17680
	To, Treasury Stock		10,880
	To, Paid in Capital from Treaury Stock (1360 x $5)		6,800
	(Excess of Cost will be transferred to Additional Paid in Capital)
Sept 1	Cash A/c	12,430
	To, Treasury Stock		9,040
	To, Paid in Capital from Treaury Stock (1360 x $5)		3,390
	(Excess of Cost will be transferred to Additional Paid in Capital)
Dec1	Cash A/c	6,760
	Paid in Capital from Treaury Stock	2,260
	To, Treasury Stock		9,040
	( Difference in cost debited to Additional Paid in Capital)
Dec 31	Income Summary A/c	29,030
	To, Retained Earnings		29,030
	(Being Net Income transferred recorded)

Answer to Question 2:

	Paid in Capital from Treaury Stock
Date	Explanation Ref	Debit	Credit	Balance
01-Jun	J10		6800	6800
01-Sep	J10		3390	10190
01-Dec	J10	2260		7930
	Treasury Stock
Date	Explanation Ref	Debit	Credit	Balance
01-Mar	J10	50320		50320
01-Jun	J10		10880	39440
01-Sep	J10		9040	30400
01-Dec	J10		9040	21360
	Retained Earnings
Date	Explanation Ref	Debit	Credit	Balance
01- Jan	J10		1,15,850
31-Dec	J10		29,030	1,44,880

Answer to Question 3:

Shareholders Equity
Paid in capital
Capital Stock
Common shares				505,300
Addittional paid in capital
Paid in capital in excess of par		189,930
Paid in capital from treasury stock	7,930
Total Additional paid in capital			197,860
Total paid in capital				703,160
Add retained earnings			144,880
Total paid in capital & retained earnings		848,040
Less :Treasury stock				(21,360)
Stockholders Equity				826,680

Answer to Question 4:

FETCHER CORPORATION

Balance Sheet (Partial)

Dec 31,2015

EQUITY AND LIABILITIES:
Shareholders Equity
Paid in capital
Capital Stock
Common shares				505,300
Addittional paid in capital
Paid in capital in excess of par		189,930
Paid in capital from treasury stock	7,930
Total Addittional paid in capital			197,860
Total paid in capital				703,160
Add retained earnings			144,880
Total paid in capital & retained earnings		848,040
Less Treasury stock				-21,360
Stockholders Equity				826,680
ASSET
Current Asset:
Cash				-13,450