Problem 11-2A Fechter Corporation had the following stockholders\' equity accoun
ID: 2584492 • Letter: P
Question
Problem 11-2A Fechter Corporation had the following stockholders' equity accounts on January 1 2015: Common Stock $5 par following treasury stock transactions. followings In 2015, the 542,650 Paid-an Capital in Excess of Par Common Stock185,430, and Retained Earnings s 101,930 company had the following tresury stock Mar. 1 Purchased 6,000 shares at $8 per share. June 1 Sold 1,260 shares at $13 per share Sept.1 Sold 1,970 shares at $10 per share. Dec. 1 Sold 1,450 shares at $6 per share. Fechter Corporation uses the cost method of accounting for treasury stock. In 2015, the company reported net income of $34,950.Explanation / Answer
Date
General Journal
Debit
Credit
Mar-01
Treasury stock (6000*$8)
48000
cash
48000
Jun-01
Cash (1260*$13)
16380
Treasury stock (1260*8)
10080
Paid in capital- treasury stock (1260*5)
6300
Sep-01
Cash (1970*10)
19700
Treasury stock
15760
Paid in capital- treasury stock(1970*2)
3940
Dec-01
Cash (1450*6)
8700
Paid in capital- treasury stock (1450*2)
2900
Treasury stock (1450*8)
11600
Dec-31
Income summary
34950
Retained earnings
34950
(b)
Paid in capital - treasury stock
Date
Explanation
Debit
Credit
Balance
Jun-01
J10
6300
6300
Sep-01
J10
3940
10240
Dec-01
J10
2900
7340
Treasury stock
Date
Explanation
Debit
Credit
Balance
Mar-01
J10
48000
48000
Jun-01
J10
10080
37920
Sep-01
J10
15760
22160
Dec-01
J10
11600
10560
Retained earnings
Date
Explanation
Debit
Credit
Balance
Jan-01
J10
101930
101930
Dec-31
J10
34950
66980
C)
JACOBSEN CORPORATION
Balance sheet
Stockholders' equity
Paid in capital
Common stock $5 par, 1000
542650
Additional Paid in capital in excess of par value
101930
Treasury stock
7340
Total additional paid in capital
109270
Total Paid in capital
651920
Retained earnings
66980
Total Paid in capital and retained earnings
718900
Less: Treasury stock
-10560
Total stockholders' equity
708340
Date
General Journal
Debit
Credit
Mar-01
Treasury stock (6000*$8)
48000
cash
48000
Jun-01
Cash (1260*$13)
16380
Treasury stock (1260*8)
10080
Paid in capital- treasury stock (1260*5)
6300
Sep-01
Cash (1970*10)
19700
Treasury stock
15760
Paid in capital- treasury stock(1970*2)
3940
Dec-01
Cash (1450*6)
8700
Paid in capital- treasury stock (1450*2)
2900
Treasury stock (1450*8)
11600
Dec-31
Income summary
34950
Retained earnings
34950