In June 2013, a company repurchased 10,000shares of stock at a price of $10 per share. InJuly 2013, the company sold 5,000 of thosetreasury shares for $8 per share. What is thecorrect journal entry for the July 2013 sale ofthe treasury shares?Dr. Cash40,000Dr. Loss on sale10,000Cr. Treasury Stock50,000Dr. Cash40,000Cr. Treasury Stock40,000AdjustDraw Dr. Cash40,000Cr. Treasury Stock40,000Dr. Cash40,000Dr. APIC10,000Cr. Treasury Stock50,000Dr. Cash40,000Cr. APIC40,000Dr. Cash50,000Cr. Treasury Stock50,000AdjustDraw

Repurchase price of 5000 Treasury Stock 5000 @$10 = $50000 Sale price of 5000 Treasury Stock 5000…

Answered: correct journal entry for the July 2013…

Business

Accounting

correct journal entry for the July 2013 sale of the treasury shares?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

In June 2013, a company repurchased 10,000
shares of stock at a price of $10 per share. In
July 2013, the company sold 5,000 of those
treasury shares for $8 per share. What is the
correct journal entry for the July 2013 sale of
the treasury shares?
Dr. Cash
40,000
Dr. Loss on sale
10,000
Cr. Treasury Stock
50,000
Dr. Cash
40,000
Cr. Treasury Stock
40,000
Adjust
Draw

Dr. Cash
40,000
Cr. Treasury Stock
40,000
Dr. Cash
40,000
Dr. APIC
10,000
Cr. Treasury Stock
50,000
Dr. Cash
40,000
Cr. APIC
40,000
Dr. Cash
50,000
Cr. Treasury Stock
50,000
Adjust
Draw

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