Instructions Lawn Spray Inc. develops and produces spraying equ pment for lawn m
ID: 2410503 • Letter: I
Question
Instructions Lawn Spray Inc. develops and produces spraying equ pment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 19,700 shares of its common stock at $19 per share. On June 14, 13,400 of the reacquired shares were sold at $25 per share, and on November 23, 5,300 of the reacquired shares were sold at $20. Required A. Journalize the transactions of January 31, June 14, and November 23. 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 wilW the balance in Treasury Stock be reported on the balance sheet?Explanation / Answer
Answers
Date
Description
Debit
Credit
ASSETS
LIABILITIES
EQUITY
31-Jan
Treasury Stock [19700 x $19]
$ 3,74,300.00
$ (3,74,300.00)
Cash
$ 3,74,300.00
$ (3,74,300.00)
(Stock reacquired at $19]
14-Jun
Cash [13400 x $25]
$ 3,35,000.00
$ 3,35,000.00
Treasury Stock [13400 x $19 cost]
$ 2,54,600.00
$ 25,46,000.00
Paid in Capital from Sale of Treasury Stock [13400 x $6]
$ 80,400.00
$ 80,400.00
(Treasury Stock re issued)
23-Nov
Cash [5300 x $20]
$ 1,06,000.00
$ 1,06,000.00
Treasury Stock [5300 x $19 cost]
$ 1,00,700.00
$ 1,00,700.00
Paid in Capital from Sale of Treasury Stock [5300 x $1]
$ 5,300.00
$ 5,300.00
Paid In capital from Sale of Treasury Stock
14-Jun
$ 80,400.00
23-Nov
$ 5,300.00
Total Balance on Dec 31
$ 85,700.00
No. of shares
Cost per share
Balance
Treasury Stock re acquired
19700
$19
$ 3,74,300.00
Re issued on 14 Jun
-13400
$19
$ (2,54,600.00)
Re issued on 23 Nov
-5300
$19
$ (1,00,700.00)
Balance on Dec 31
1000
$19
$ 19,000.00
Balance in treasury Stock is reported under “Total Stockholder’s Equity” Section as a “deduction” from total contributed capital (including Retained earnings). It is DEDUCTED under Total Stockholder’s Equity section.
Format is provided below:
Total Contributed capital
$ XXX
Less: Treasury Stock [1000 shares at $19]
$ (19,000.00)
Total Stockholders' Equity
$ XXX
Date
Description
Debit
Credit
ASSETS
LIABILITIES
EQUITY
31-Jan
Treasury Stock [19700 x $19]
$ 3,74,300.00
$ (3,74,300.00)
Cash
$ 3,74,300.00
$ (3,74,300.00)
(Stock reacquired at $19]
14-Jun
Cash [13400 x $25]
$ 3,35,000.00
$ 3,35,000.00
Treasury Stock [13400 x $19 cost]
$ 2,54,600.00
$ 25,46,000.00
Paid in Capital from Sale of Treasury Stock [13400 x $6]
$ 80,400.00
$ 80,400.00
(Treasury Stock re issued)
23-Nov
Cash [5300 x $20]
$ 1,06,000.00
$ 1,06,000.00
Treasury Stock [5300 x $19 cost]
$ 1,00,700.00
$ 1,00,700.00
Paid in Capital from Sale of Treasury Stock [5300 x $1]
$ 5,300.00
$ 5,300.00