Textbook Problem

Accounting for Treasury Stock

On January 3,2019, Tommyboy Corporation repurchases 250,000 shares of its outstanding common stock for $18 per share. On May 1, 2019, Tommyboy sells 80,500 shares of treasury stock for $12 per share. On October 1,2019, Tommyboy sells 40,000 shares of its treasury stock for $31 per share.

Required:

1. Prepare the journal entries to record these transactions.
2. How will these transactions affect Tommyboy’s 2019 income statement?

Use the following information for Cornerstone Exercises 10-30 and 10-31:

Kellman Company purchases 110,000 shares of treasury stock for S8 per share on September 4, 2020