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Journaling Treasury Stock Credit

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The fair value of Canfield Company's common stock was $34 per share on December 31, 2013 and $45 per share on December 31, 2014. Canfield acquired 5,000 shares of its own common stock at $38 per share on March 10, 2014, and sold 4,000 of these shares at $42 per share on September 25, 2014. Canfield Company uses the cost method to account for treasury stock. The journal entry to record the sale of the treasury stock should credit

a. Treasury Stock for $152,000 and Retained Earnings for $16,000
b. Treasury Stock for $190,000 and Retained Earnings for $20,000
c. Treasury Stock for $152,000 and Paid-in Capital from Treasury Stock for $16,000
d. Treasury Stock for $168,000

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Solution Summary

This solution discusses the exact journal entry needed to record the sale of the treasury stock for Canfield Company.

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See Also This Related BrainMass Solution

Journalize and post transactions, prepare stockholders equity - Jajoo Corp.

The stockholders equity accounts of Jajoo corp on Jan.1,2006 were as follows.
Preferred Stock (10%,$100 par noncumulative, 5,000 shares authorized)=$300,000
Common Stock ($5 stated value, 300,000 shares authorized)=$1,000,000
Paid in capital in excess of par value preferred stock=$20,000
Paid in capital in excess of stated value common stock=$425,000
Retained Earnings Treasury stock-common($5,000 shares)=$40,000

During 2006, the corporation had the following transactions and events pertaining to its stockholders equity.

Feb.1 Issued 3,000 shares of common stock for $25,000.
March 20 Purchased 1,500 additional shares of common treasury stock at $8 per share
June 14 Sold 4,000 shares of treasury stock common for $36,000
Sept 3 Issued 2,000 shares of common stock for a patent valued at $17,000
Dec 31 Determined that net income for the year was $340,000.

Instructions:
a. Journalize the transactions and the closing entry for net income.
b. enter the beginning balances in the accounts and post the journal entries to the stockholders equity accounts.
c. Prepare a stockholders equity section at Dec 31, 2006
d. Compute the book value per share of common stock at Dec 31, 2006(round to two decimals)

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