Record Treasury Stock Transactions Under the Cost Method
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Original sale of the $50 par value common shares of XYZ Company was recorded as follows:
Cash 290,000
Common stock 250,000
Paid in capital in excess of par value 40,000
a: Bought 300 shares of common stock as treasury shares at $62
b: Sold 80 shares of treasury stock at $60
c: Sold 40 treasury shares at $68.
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Solution Summary
The solution discusses record treasury stock transactions under the cost method.
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a. Total amount is 300 X 62 = 18,600
The entry is
Treasury Stock Dr 18,600
Cash Cr 18,600.
b. When treasury stock is sold below cost, the treasury stock account is credited for cost amount. The difference is then ...
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