Treasury Stock
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Mosby Company's balance sheet shows:
Common stock, $20 par $3,000,000
Paid-in capital in excess of par 1,050,000
Retained earnings 750,000
Record the following transactions by the cost method.
a. Bought 5,000 shares of its common stock at $30 a share.
b. Sold 2,500 treasury shares at $31 a share.
c. Sold 1,000 shares of treasury stock at $27 a share.
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Solution Summary
The solution explains how to record some transactions involving treasury stock
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a. Bought 5,000 shares of its common stock at $30 a share.
The total cost is 5,000X30=150,000. The entry is
Treasury Stock Dr 150,000
Cash Cr 150,000
b. Sold 2,500 treasury shares at $31 a share.
Under the cost method, when treasury stock is sold, the credit to ...
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