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Before Buckeye Communications Corp. engages in the treasury stock transactions listed below, its general ledger reflects, among others, the following account balances (par value $50).
Common Stock $120,000
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Question & Answer: Before Buckeye Communications Corp. engages in the treasury stock transactions listed below, its general ledger reflects, amo…..
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Paid in Excess- Common Stock $36,000
Retained Earnings $30,000
Record the treasury stock transactions (given below) assuming a FIFO method for purchase/sale purposes under the COST METHOD.
(a) Bought 300 shares of treasury stock at $63 per share.
(b) Bought 150 shares of treasury stock at $67 per share.
(c) Sold 225 shares of treasury stock at $64 per share.
(d) Sold 120 shares of treasury stock at $58 per share.
Expert Answer
The required Journal entries are :-
| a) | Treasury stock ( 300 * 63 ) | 18900 | |
| Cash | 18900 | ||
| b) | Treasury stock ( 150 * 67 ) | 10050 | |
| Cash | 10050 | ||
| c) | Cash ( 225 * 64 ) | 14400 | |
| Treasury stock ( 225 * 63 ) | 14175 | ||
| Paid in capital from sale of treasury stock | 225 | ||
| d) | Cash ( 120 * 58 ) | 6960 | |
| Paid in capital from sale of treasury stock | 780 | ||
| Treasury stock ( 75 * 63 ) + ( 45 * 67 ) | 7740 |
