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    Treasury stock : Journal entries

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    Treasury Stock
    The stockholders' equity section of Carol Aityassine's (CA) balance sheet at December 31, 2003, was as follows:

    Common stock--$10 par (authorized 1,000,000 shares,
    issued and outstanding 600,000 shares) $ 6,000,000
    Paid-in capital in excess of par 1,500,000
    Retained earnings 3,250,000

    Prepare journal entries to reflect the following treasury stock transactions showing how each is accounted for under the cost method. (Show computations.)

    10. On January 4, 2004, having idle cash, CA Co. repurchased 25,000 shares of its out-standing stock for $450,000.

    11. On March 4, CA sold 5,000 of these reacquired shares at $22 per share.

    12. Show the proper disclosures in the stockholders' equity section of the balance sheet issued at the end of the first quarter, March 31, 2004. Assume net income of $100,000 during the first quarter.

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    Solution Summary

    Solution contains journal entries.