Problem 11-2A Fechter Corporation had the following stockholders’ equity account
ID: 2520439 • Letter: P
Question
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.
Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $31,380.
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
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 $7 per share.Explanation / Answer
Answer
Paid-in Capital from Treasury Stock
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
Jun-01
Cash [sold 1370 x $4]
J10
0
5480
$5,480 Credit
Sep-01
Cash [sold 1770 x $2]
J10
0
3540
$9,020 Credit
Dec-01
Cash [sold 1220 x $1]
J10
1220
0
$7,800 Credit
Treasury Stock
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
Mar-01
Cash [purchased] 5610 x $8
J10
44880
0
$44,880 Debit
Jun-01
Cash [sold 1370 x $8]
J10
0
10960
$33,920 Debit
Sep-01
Cash [sold 1770 x $8]
J10
0
14160
$19,760 Debit
Dec-01
Cash [sold 1220 x $8]
J10
0
9760
$10,000 Debit
Retained Earnings
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
jan 1, 2017
Balance
?
0
0
$117,100 Credit
Dec-31
Net Income
J10
0
31380
$148,480 Credit
Paid-in Capital from Treasury Stock
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
Jun-01
Cash [sold 1370 x $4]
J10
0
5480
$5,480 Credit
Sep-01
Cash [sold 1770 x $2]
J10
0
3540
$9,020 Credit
Dec-01
Cash [sold 1220 x $1]
J10
1220
0
$7,800 Credit
Treasury Stock
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
Mar-01
Cash [purchased] 5610 x $8
J10
44880
0
$44,880 Debit
Jun-01
Cash [sold 1370 x $8]
J10
0
10960
$33,920 Debit
Sep-01
Cash [sold 1770 x $8]
J10
0
14160
$19,760 Debit
Dec-01
Cash [sold 1220 x $8]
J10
0
9760
$10,000 Debit
Retained Earnings
Date
Explanation
Ref.
Debit ($)
Credit ($)
Balance
jan 1, 2017
Balance
?
0
0
$117,100 Credit
Dec-31
Net Income
J10
0
31380
$148,480 Credit