Question

Calculator On April 2 a corporation purchased for cash 7,000 shares of its own $14 par common stock at $28 per share. It sold 4,000 of the treasury shares at $31 share on June 10. The remaining 3000 shares were sold on November 10 for $24 per share. a. Journalize the entries to record the purchase (treasury stock is recorded at cost). Apr. 2 b. Journalize the entries to record the sale of the stock. If an amount box does not require an entry, leave it blank. Jun. 10 10 011 11

Answer 1

solution a) Date Account title & Explanation Gredit Delit 196000 Asp2 ] 196000 Treasury stock ar [ 7000 x 28] To cash [ To record purchase of Treasury stock b) bate Account title se Explanation Delit Gedet 124000 Jun 10 112.000 12000 Cash Dr (4000×31) To Treasury stock [ 4000 x 28 To paid in capstal from Treasury Stock To record sale of 4000 treasury Shares] Cash Do [ 3000 x 24] Nov 10 72000 Pald in capital from Treasury 12000 - Stock DY 84000 * Tмада»«k Cзово х23] [ To record sales of 3000 Treasury Shares

working : o cash received from sale of common stock = 12000 Shares x 5 = 60000 paid in capital in excess of par - Common = 12000 shares X (24-5) = 278 000 Total cash received = 60000 + 228000 = 288000 2) cash received from sale of preferred stock = 3000 Shares X 50 = 150000 paid on Capital in excess of DAT rulerned 3000 horrex (106-5 = 168000 Total cash recelved 3000 shares X 106 = 318000 Date Account title & Explanation Debit Credit top 1 286оор Cash pus"n Сер! *n еxtем Рая - Common 228000 Common stock 60000 [ To record the common stock Aipt Cash 316000 paid in capital in excess of par 168000 - preferred Preferred stock 150000 [to record the preferred stock]