Accounting for Treasury Stock On January 3, 2013, Tommyboy Corporation repurchas
ID: 2475460 • Letter: A
Question
Accounting for Treasury Stock
On January 3, 2013, Tommyboy Corporation repurchases 250,000 shares of its outstanding common stock for $18 per share. On May 1, 2013, Tommyboy sells 80,500 shares of treasury stock for $12 per share. On October 1, 2013, Tommyboy sells 40,000 shares of its treasury stock for $31 per share.
Required:
1. Prepare the journal entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.
2013 Jan. 3
Accounts Payable
Additional Paid-In Capital-Treasury Stock
Cash
Retained Earnings
Treasury Stock
Correct 2 of Item 1
Correct 3 of Item 1
Accounts Payable
Additional Paid-In Capital-Treasury Stock
Cash
Retained Earnings
Treasury Stock
Correct 4 of Item 1
Correct 5 of Item 1
(Record purchase of treasury shares)
May 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Cash
Common Stock
Treasury Stock
Correct 8 of Item 1
Correct 9 of Item 1
Correct 10 of Item 1
Accounts Receivable
Additional Paid-In Capital- Treasury Stock
Common Stock
Retained Earnings
Treasury Stock
Correct 11 of Item 1
Correct 12 of Item 1
Correct 13 of Item 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Cash
Retained Earnings
Treasury Stock
Correct 14 of Item 1
Correct 15 of Item 1
Correct 16 of Item 1
(Record reissue of treasury shares)
Oct. 1
Accounts Receivable
Additional Paid-In Capital-Treasury Stock
Cash
Common Stock
Treasury Stock
Correct 19 of Item 1
Correct 20 of Item 1
Correct 21 of Item 1
Accounts Receivable
Cash
Common Stock
Dividends Payable
Treasury Stock
Correct 22 of Item 1
Correct 23 of Item 1
Correct 24 of Item 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Additional Paid-In Capital-Treasury Stock
Cash
Dividends Payable
Correct 25 of Item 1
Correct 26 of Item 1
Correct 27 of Item 1
(Record reissue of treasury shares)
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Solution
2. How will these transactions affect Tommyboy's 2013 income statement?
The income statement is Selectincreaseddecreasednot affectedCorrect 1 of Item 2 by treasury stock transactions because the income statement is Selectincludes business and owners transactions.reserved for transactions with nonowners.Correct 2 of Item 2
Hide1. Prepare the journal entries to record these transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.
2013 Jan. 3
Accounts Payable
Additional Paid-In Capital-Treasury Stock
Cash
Retained Earnings
Treasury Stock
Correct 2 of Item 1
Correct 3 of Item 1
Accounts Payable
Additional Paid-In Capital-Treasury Stock
Cash
Retained Earnings
Treasury Stock
Correct 4 of Item 1
Correct 5 of Item 1
(Record purchase of treasury shares)
May 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Cash
Common Stock
Treasury Stock
Correct 8 of Item 1
Correct 9 of Item 1
Correct 10 of Item 1
Accounts Receivable
Additional Paid-In Capital- Treasury Stock
Common Stock
Retained Earnings
Treasury Stock
Correct 11 of Item 1
Correct 12 of Item 1
Correct 13 of Item 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Cash
Retained Earnings
Treasury Stock
Correct 14 of Item 1
Correct 15 of Item 1
Correct 16 of Item 1
(Record reissue of treasury shares)
Oct. 1
Accounts Receivable
Additional Paid-In Capital-Treasury Stock
Cash
Common Stock
Treasury Stock
Correct 19 of Item 1
Correct 20 of Item 1
Correct 21 of Item 1
Accounts Receivable
Cash
Common Stock
Dividends Payable
Treasury Stock
Correct 22 of Item 1
Correct 23 of Item 1
Correct 24 of Item 1
Accounts Payable
Additional Paid-In Capital-Common Stock
Additional Paid-In Capital-Treasury Stock
Cash
Dividends Payable
Correct 25 of Item 1
Correct 26 of Item 1
Correct 27 of Item 1
(Record reissue of treasury shares)
Explanation / Answer
Accounting for Treasury Stock On January 3, 2013, Tommyboy Corporation repurchas