Purchase Solution

Stocks, Equity and Journal Entries

Not what you're looking for?

Ask Custom Question

The Cosmo Company was started by issuing 800 shares of $10 par value stock at an average market price of $20 per share. The company repurchased 100 shares at a market price of $15 per share. The company later sold 50 shares at a market price of $25 per share. At the end of the first year of operations the company has $2,600 of retained earnings in addition to its contributed capital.

a. Prepare journal entries to record the treasury stock transactions.

b. Prepare the equity section of the balance sheet for Cosmo Company.

Purchase this Solution

Solution Summary

This solution prepares journal entries to record treasury stock transactions for Cosmo Company. This solution also prepares the equity section of the balance sheet. All work and calculations are shown and explained. Includes 1 reference.

Solution Preview

(A)

We would need to record the transactions as follows:

Treasury stock 1500 (100 x 15)
Cash 1500

Cash (50 x 25) ...

Purchase this Solution


Free BrainMass Quizzes
Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.