Explore BrainMass

Explore BrainMass

    Journal entries

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    *Discribe how to calculate

    On Oct 10, the stockholders' equity of Syntax Systems appears as follows

    Comon stock---$10 par value, 72,000 shares
    authorized, issued, and outstanding.......................$720.000
    Paid-in capital in excess of par value, common stock.........$216,000
    Retained earnings............................................$864,000
    Total stockholders.........................................$1,800,000

    1: Prepare journal entries to record the following transactions for Syntax Systems
    a: Purchased 5,000 shares of its own common stock at $22 per share on Oct 11.
    b: Sold 1,000 trasury shares on Nov 1 for $28 cash per share
    c: Sold all remaining treasury shares on Nov 25 for $17 cash per share
    2: Explain how the company's equity section changes after the Oct 11 treasury stock purchase, and prepare the revised equity section of its balance sheet at that date.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:56 pm ad1c9bdddf
    https://brainmass.com/business/accounting/journal-entries-309026

    Solution Preview

    1. a. Total amount of treasury stock = 5,000 X22 =$110,000. The entry is
    Treasury Stock Dr 110,000
    Cash Cr 110,000

    b. When treasury stock is sold above cost, the credit to treasury stock is credited with the cost price. The difference between sale price and cost price goes to paid in capital - treasury stock. The entry is
    Cash Dr (1,000 X 28) 28,000
    ...

    Solution Summary

    The solution explains the journal entries for the given equity transactions and the impact on the equity section in the balance sheet

    $2.19

    ADVERTISEMENT