Question

On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 91,000 shares authorized, issued, and outstanding $ 910,000 Paid-in capital in excess of par value, common stock 311,000 Retained earnings 1,016,000 Total stockholders’ equity $ 2,237,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 6,900 shares of its own common stock at $44 per share on October 11. Sold 1,475 treasury shares on November 1 for $50 cash per share. Sold all remaining treasury shares on November 25 for $39 cash per share.

Answer 1

solution:

Journal Entries - Sherman Systems
Date	Particulars	Debit	Credit
11-Oct	Treasury stock Dr	$303,600.00
	To Cash		$303,600.00
	(To record purchase of own stock)
1-Nov	Cash Dr	$73,750.00
	To Treasury stock		$64,900.00
	To Paid in capital from treasury stock		$8,850.00
	(To record sale of treasury stock)
25-Nov	Cash Dr	$211,575.00
	Paid in capital from treasury stock Dr	$8,850.00
	Retained earnings Dr	$18,275.00
	To Treasury stock		$238,700.00
	(To record sale of treasury stock)