Before Pronghorn Corporation engages in the following treasury stock transactions, its general ledger reflects, among others, the following account balances (par value of its stock is $30 per share). Paid-in Capital in Excess of Par—Common Stock Common Stock Retained Earnings $107,700 $244,800 $75,400 Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method for purchase-sale purposes. (a) Bought 370 shares of treasury stock at $40 per share. (b) Bought 310 shares of treasury stock at $44 per share. (c) Sold 330 shares of treasury stock at $42 per share. (d) Sold 100 shares of treasury stock at $38 per share.
Before Pronghorn Corporation engages in the following treasury stock transactions, its general ledger reflects, among others, the following account balances (par value of its stock is $30 per share). Paid-in Capital in Excess of Par—Common Stock Common Stock Retained Earnings $107,700 $244,800 $75,400 Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method for purchase-sale purposes. (a) Bought 370 shares of treasury stock at $40 per share. (b) Bought 310 shares of treasury stock at $44 per share. (c) Sold 330 shares of treasury stock at $42 per share. (d) Sold 100 shares of treasury stock at $38 per share.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter15: Shareholders’ Equity: Capital Contributions And Distributions
Section: Chapter Questions
Problem 15E
Related questions
Question
Before Pronghorn Corporation engages in the following
|
Paid-in Capital in Excess of Par—Common Stock
|
Common Stock
|
|
||
|
$107,700
|
$244,800
|
$75,400
|
Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method for purchase-sale purposes.
| (a) | Bought 370 shares of treasury stock at $40 per share. | |
| (b) | Bought 310 shares of treasury stock at $44 per share. | |
| (c) | Sold 330 shares of treasury stock at $42 per share. | |
| (d) | Sold 100 shares of treasury stock at $38 per share. |
Expert Solution
Answer
| Sno | Account Titles and Explanation | Debit | Credit |
| A | Treasury Stock (370 shares X $ 40 per share) | $ 14,800 | |
| Cash | $ 14,800 | ||
| (To record purchase of Treasury Stock) | |||
| B | Treasury Stock (310 shares X $ 44 per share) | $ 13,640 | |
| Cash | $ 13,640 | ||
| (To record purchase of Treasury Stock) | |||
| C | Cash (330 shares X $ 42 per share) | $ 13,860 | |
| Treasury Stock (330 shares X $ 40 per share) | $ 13,200 | ||
| Additional Paid in Capital (330 shares X $ 2 per share) | $ 660 | ||
| (To record reissue of Treasury Stock) | |||
| D | Cash (100 shares X $ 38 per share) | $ 3,800 | |
| Additional Paid in Capital (Working Note) | $ 320 | ||
| Treasury Stock (Working Note) | $ 4,120 | ||
| (To record reissue of Treasury Stock) |
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