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5 April, 07:06

SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 19,100 shares of its common stock at $20 per share. On June 9, 13,700 of the reacquired shares were sold at $25 per share, and on November 13, 4,000 of the reacquired shares were sold at $21. Required:

a. Journalize the transactions of March 9, June 9, and November 13. Refer to the Chart of Accounts for exact wording of account titles.

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

c. What is the balance in Treasury Stock on December 31 of the current year?

d. How will the balance in Treasury Stock be reported on the balance sheet?

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  1. 5 April, 08:00
    0
    treasury stock 382,000 debit

    cash 382,000 credit

    cash 342,500 debit

    treasury stock 274,000 credit

    additional paid-in TS 68,500 credit

    cash 84,000 debit

    treasury stock 80,000 credit

    additional paid-in TS 4,000 credit

    additional paid-in TS 72,500

    Treasury Stock 28,000

    The Treasury Stock will be reported as a decrease to the equity.

    Explanation:

    19,100 shares x $20 per share = 382,000

    13,700 shares x $20 per share = 274,000

    13,700 shares x $25 per share = 342,500

    additional paid-in = 68,500

    4,000 shares x $21 per share = 84,000

    4,000 shares x $20 per share = (80,000)

    additional paid-in 4,000

    68,500 + 4,000 = 72,500 additional paid-in TS

    TS 382,000 - 274,000 - 80,000 = 28,000
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Home » Business » SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 19,100 shares of its common stock at $20 per share.
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