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Greeve Corporation Accounting

P12-2A Greeve Corporation had the following stockholders' equity accounts on January 1, 2006: Common Stock ($1 par) $400, 000, Paid-in Capital in Excess of Par Value $500, 000, and Retained Earnings $100, 000. In 2006, the company had the following treasury stock transactions. Mar. 1 Purchased 5, 000 shares at $7 per share. June 1 Sold 1, 000 shares at $10 per share. Sept. 1 Sold 2, 000 shares at $9 per share. Dec. 1 Sold 1, 000 shares at $5 per share. Greeve Corporation uses the cost method of accounting for treasury stock. In 2006, company reported net income of $60, 000. (a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2006, for the net income. (b) Open accounts for (1) Paid-in Capital from Treasury Stock, (2) Treasury Stock, and (3) Retained Earnings. Post to these accounts using J12 as the posting references. (c) Prepare the stockholders' equity section for Greeve Corporation at December 31, 2006.

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(a)

Mar. 1 Treasury Stock 35,000
Cash 35,000
(5,000 x $7 = 35,000)

June 1 Cash 10,000
Treasury Stock 7,000
Paid-in Capital from Treasury Stock 3,000
(1,000 x $7 = 7,000)

Sept. 1 Cash 18,000
Treasury Stock 14,000
Paid-in Capital from Treasury Stock 4,000 ...

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