Agler Corporation\'s balance sheet reported the following: Capital stock outstan
ID: 2475984 • Letter: A
Question
Agler Corporation's balance sheet reported the following: Capital stock outstanding. 5,000 shares, par $30 per share $150,000 Paid-in capital in excess of par 80,000 Retained earnings 100,000 The following transactions occurred this year: (a) Purchased 200 shares of treasury stock, paying $60 per share. (b) Sold 150 of the shares of treasury stock at $65 per share. (c) Sold the remaining shares of treasury stock at $50 per share. Instructions - Prepare the journal entry for these transactions under the cost method of accounting for treasury stock.Explanation / Answer
Ans;
Date Account title Debit credit a Treasury stock [200*60] 12,000 cash 12,000 [being treasury stock worth 12000 repurchased] b cash [150*65] 9750 Treasury stock [150*60] 9000 Paid in capital from treasury stock [150*(65-60)] 750 [Being treasury stock sold rin excess of par of$ 60 is recorded] c cash [50*50] 2500 paid in capital from treasury stock 750 Retained earnings 250 Treasury stock [(200purchase-150sold ) * 60] 3000 [Being treasury stock left [200-150] =50 are sold below par. Being loss on sale is debited to paid in capital treasury stcok available (entry 2) and any excess loss is debited to retained earnings( 3000-2500-750)