PE 13-5B Entries for treasury stock

On May 27, Hydro Clothing Inc. reacquired 75,000 shares of its common stock at $8 per share. On August 3, Hydro Clothing sold 54,000 of the reacquired shares at $11 per share. On November 14, Hydro Clothing sold the remaining shares at $7 per share.

Journalize the transactions of May 27, August 3, and November 14.


Answer:

May 27 Treasury Stock (75,000 shares × $8) 600,000
Cash 600,000
Aug. 3 Cash (54,000 shares × $11) 594,000
Treasury Stock (54,000 shares × $8) 432,000
Paid-In Capital from Sale of
Treasury Stock [54,000 shares × ($11 – $8)] 162,000
Nov. 14 Cash (21,000 shares × $7) 147,000
Paid-In Capital from Sale of
Treasury Stock [21,000 shares × ($8 – $7)] 21,000
Treasury Stock (21,000 shares × $8) 168,000