Ellison Company's balance sheet shows: Common stock, $20 par $3,000,000 Paid-in capital in excess of par 1,050,000 Paid-in capital treasury stock 0 Retained earnings 750,000 Instructions: Record the following transactions with the cost method. (a) Bought 12,000 shares of its common stock at $29 a share. (b) Sold 6,000 treasury shares at $30 a share. (c) Sold 3,000 shares of treasury stock at $26 a share. (d) What is the ending balance after the above transactions in the retained earnings account?
Ellison Company's
Common stock, $20 par $3,000,000
Paid-in capital in excess of par 1,050,000
Paid-in capital
Retained earnings 750,000
Instructions:
Record the following transactions with the cost method.
(a) Bought 12,000 shares of its common stock at $29 a share.
(b) Sold 6,000 treasury shares at $30 a share.
(c) Sold 3,000 shares of treasury stock at $26 a share.
(d) What is the ending balance after the above transactions in the retained earnings account?
The retained earnings are the accumulated profits of the business. The retained earnings of the business are increased with the profits and are decreased with the dividend declaration.
The treasury stock shares are the own shares of the company that are repurchased from the shareholders.
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