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    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 Preview

    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 ...

    Solution Summary

    The solution explains how to record some transactions involving treasury stock

    $2.19

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