Problem 11-2A Journalize the treasury stock transactions, and prepare the closin
ID: 2520141 • Letter: P
Question
Problem 11-2A
Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2017, for net income. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amount)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1Mar. 1June 1Sept. 1Dec. 1Dec. 31
Open accounts for Paid-in Capital from Treasury Stock, Treasury Stock, and Retained Earnings. (Post entries in the order of journal entries presented in the previous part.)
Paid-in Capital from Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
J10
J10
J10
Treasury Stock
Date
Explanation
Ref.
Debit
Credit
Balance
J10
J10
J10
J10
Retained Earnings
Date
Explanation
Ref.
Debit
Credit
Balance
Balance
?
J10
Prepare the stockholders’ equity section for Fechter Corporation at December 31, 2017. (Enter the account name only and do not provide the descriptive information provided in the question.)
FECHTER CORPORATION
Balance Sheet (Partial)
Problem 11-2A
Fechter Corporation had the following stockholders’ equity accounts on January 1, 2017: Common Stock ($5 par) $519,250, Paid-in Capital in Excess of Par—Common Stock $192,650, and Retained Earnings $117,100. In 2017, the company had the following treasury stock transactions.Mar. 1 Purchased 5,610 shares at $8 per share. June 1 Sold 1,370 shares at $12 per share. Sept. 1 Sold 1,770 shares at $10 per share. Dec. 1 Sold 1,220 shares at $7 per share.
Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $31,380.
Explanation / Answer
Journal Entries Sr. No. Sr. No. Account Title and explanation Debit Credit 1 Mar, 01 Treasurry stock (5,610 shares X $ 8) $44,880 To Cash $44,880 (To Record the purchase of treasurry Stock) 2 June, 01 Cash (1,370 Shares X $ 12) $16,440 To Treasurry Stock (1370 Shares X $ 8) $10,960 To Addittional Pais in Capital - Treasurry Stock $5,480 (To Record the sale of treasurry Stock) Cash (1,770 Shares X $ 10) $17,700 3 Sept, 01 To Treasurry Stock (1770 Shares X $ 8) $14,160 To Addittional Pais in Capital - Treasurry Stock $3,540 (To Record the sale of treasurry Stock) Cash (1,220 Shares X $ 7) $8,540 Addittional Pais in Capital - Treasurry Stock $1,220 4 Dec, 01 To Treasurry Stock (1220 Shares X $ 8) $9,760 (To Record the sale of treasurry Stock) 5 Dec , 31 " No Jounral Entry"