Exercise 11-8 Treasury Stock Transactions
Exercise 11-8Â Treasury Stock Transactions
The Stockholders’ Equity category of Little Joe’s balance sheet on January 1, 2014, appeared as follows:
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Common stock, $5 par, 40,000 shares issued
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and outstanding
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$200,000
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Additional paid-in capital
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90,000
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Retained earnings
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100,000
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Total stockholders’ equity
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$390,000
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The following transactions occurred during 2014:
a.     Reacquired 5,000 shares of common stock at $20 per share on February 1.
b.     Reacquired 1,200 shares of common stock at $13 per share on March 1.
Required
1.       Record the entries in journal form.
2.       Assume that the treasury stock was reissued on October 1 at $12 per share. Did the company benefit from the treasury stock reissuance? Where is the ‘‘gain’’ or ‘‘loss’’ presented on the fi- nancial statements?
3.       What effect did the two transactions to purchase treasury stock and the later reissuance of that stock have on the Stockholders’ Equity section of the balance sheet?
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Answers
Status NEW
Posted 08 Oct 2017 08:10 PM
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Attachments
file 1507495462-Exercise 11-8 Treasury Stock Transactions.docx preview (118 words )
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