Dec. 1Purchased 1,300 shares of the company's $1 par value common stock as treasury stock, paying cash of $8 per share.Dec. 15Sold 400 shares of the treasury stock for cash of $11 per share.Dec. 20Sold 700 shares of the treasury stock for cash of $4 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,500.)Requirement 1. Journalize these transactions. (Record debits first, then credits. Exclude explanations from any journal entries.) Dec.1: Purchased1,300shares of the company's $1 par value common stock as treasury stock, paying cash of$8per share. DateAccountsDebitCreditDec. 1Treasury Stock—Common10,400 Cash 10,400 Part 2Dec.15: Sold400shares of the treasury stock for cash of$11per share. DateAccountsDebitCreditDec. 15Cash4,400 Treasury Stock—Common 3,200 Paid-In Capital from Treasury Stock Transactions 1,200 Part 3Dec.20: Sold700shares of the treasury stock for cash of$4per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions onDecember20 is$2,500.) DateAccountsDebitCreditDec. 20Cash2,800 Paid-In Capital from Treasury Stock Transactions2,500 Retained Earnings300 Treasury Stock—Common 5,600Part 4Requirement 2. How willDiscount CenterFurniture, Inc. report treasury stock on its balance sheet as ofDecember31,2024? Discount CenterFurniture, Inc. will report treasury stockabove retained earningsabove paid-in capitalabove retained earningsas part of paid-in capitalbeneath retained earningson the balance sheet asa reductiona reductionan increaseto total stockholders' equity.

Treasury stock refers to repurchase of outstanding stock re purchased by issuing company from it's shareholders. When treasury stock is purchased the number of outstanding shares gets reduced and when treasury stocks are sold the number of outstanding shares increases. Solution: Requirement 1: Journal entries Date Particulars Debit ($) Credit ($) Dec-01 Treasury stock A/c Dr. 10400 (1300 shares*$8/share) To cash A/c 10400 Dec-15 Cash A/c Dr. 4400 (400 shares*$11/share) To Treasury stock A/c 3200 (400 shares*$8/share) To Paid in capital from treasury stock transaction A/c 1200 (400 shares*($11-$8)/share) Dec-20 Cash A/c Dr. 2800 (700 shares*$4/share) Paid in capital from treasury stock transaction A/c Dr. 2500 (Balance of $2500 is debited fully) Retained earnings A/c Dr. 300 ($5600-$2800-$2500) To Treasury stock A/c 5600 (700 shares*$8/share) Requirement 2: Reporting of treasury stock as on Dec 31: Particulars Treasury stock purchased on Dec-01 1300 Less: Treasure stock sold on Dec-15 (400) Less: Treasure stock sold on Dec-20 (700) =Number of treasury stock on hand 200 *Purchase price per treasury stock $8 =Value of treasury stock on hand as on Dec-31 $1600 This value of treasury stock of $1600 shall be recorded as reduction from total stockholder's equity.

Answered: Furniture, Inc. report treasury stock…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Dec. 1	Purchased 1,300 shares of the company's $1 par value common stock as treasury stock, paying cash of $8 per share.
Dec. 15	Sold 400 shares of the treasury stock for cash of $11 per share.
Dec. 20	Sold 700 shares of the treasury stock for cash of $4 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,500.)

Part 2

Dec.

15: Sold

400

shares of the treasury stock for cash of

$11

per share.

Date	Accounts	Debit	Credit
Dec. 15	Cash	4,400
	Treasury Stock—Common		3,200
	Paid-In Capital from Treasury Stock Transactions		1,200

Part 3

Dec.

20: Sold

700

shares of the treasury stock for cash of

per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on

December

20 is

$2,500.)

Date	Accounts	Debit	Credit
Dec. 20	Cash	2,800
	Paid-In Capital from Treasury Stock Transactions	2,500
	Retained Earnings	300
	Treasury Stock—Common		5,600