Question

1. 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 8,800 shares of its The stock outstanding when a corporation has issued only one class of stock.common stock at $29 per share. On June 14, 5,500 of the reacquired shares were sold at $31 per share, and on November 23, 2,100 of the reacquired shares were sold at $33.

   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	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Preferred Stock Treasury Stock
   	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock
   June. 14	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock
   	Cash Common Stock Preferred Stock Retained Earnings Treasury Stock
   	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Preferred Stock Retained Earnings
   Nov. 23	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock
   	Cash Common Stock Preferred Stock Retained Earnings Treasury Stock
   	Cash Common Stock Paid-In Capital from Sale of Treasury Stock Preferred Stock Retained Earnings

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   b. What is the balance in Capital contributed to a corporation by the stockholders and others.Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
   $

   • Credit
   • Debit

   c. What is the balance in Treasury Stock on December 31 of the current year?
   $

   • Credit
   • Debit

   d. How will the balance in Treasury Stock be reported on the balance sheet?
   

   • As an asset
   • As an addition to stockholders' equity
   • As common stock in the stockholders' equity section
   • As a deduction from stockholders' equity
   • As a liability

Answer 1

a
Jan 31	Treasury Stock	255200		=8800*29
	Cash		255200
June. 14	Cash	170500		=5500*31
	Treasury Stock		159500	=5500*29
	Paid-In Capital from Sale of Treasury Stock		11000
Nov. 23	Cash	69300		=2100*33
	Treasury Stock		60900	=2100*29
	Paid-In Capital from Sale of Treasury Stock		8400
b	Paid-In Capital from Sale of Treasury Stock	19400	Credit	=11000+8400
c	Treasury Stock	34800	Debit	=255200-159500-60900
d	As a deduction from stockholders' equity