Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 4,900 shares of its common stock at $75 per share. On September 22, Mystic Lake sold 3,400 of the reacquired shares at $84 per share. The remaining 1,500 shares were sold at $71 per share on November 23. a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank. July 9 Treasury Stock 367,500 ✓ 0 ✓ Cash Sept. 22 Cash ✓ Treasury Stock Paid-In Capital from Sale of Treasury Stock Nov. 23 Cash Feedback ✓ - ✓ Paid-In Capital from Sale of Treasury Stock Treasury Stock ✓ ✓ 285,600 0 0 106,500 ✓ 0 ✓ ✓ 6,000 ✓ ✓ ✓ 0 367,500 c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? All of these reasons. ✓ 0 228,000 X 57,600 X 0 0 112,500 Check My Work The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is the company receiving? What is it giving up? Keep in mind the price paid to buy the treasury stock and the price the shares are resold for at a later date. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? 51,600 X Credit
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 4,900 shares of its common stock at $75 per share. On September 22, Mystic Lake sold 3,400 of the reacquired shares at $84 per share. The remaining 1,500 shares were sold at $71 per share on November 23. a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank. July 9 Treasury Stock 367,500 ✓ 0 ✓ Cash Sept. 22 Cash ✓ Treasury Stock Paid-In Capital from Sale of Treasury Stock Nov. 23 Cash Feedback ✓ - ✓ Paid-In Capital from Sale of Treasury Stock Treasury Stock ✓ ✓ 285,600 0 0 106,500 ✓ 0 ✓ ✓ 6,000 ✓ ✓ ✓ 0 367,500 c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? All of these reasons. ✓ 0 228,000 X 57,600 X 0 0 112,500 Check My Work The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is the company receiving? What is it giving up? Keep in mind the price paid to buy the treasury stock and the price the shares are resold for at a later date. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? 51,600 X Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Treasury Stock Transactions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 4,900 shares of its common stock at $75 per share. On September 22,
Mystic Lake sold 3,400 of the reacquired shares at $84 per share. The remaining 1,500 shares were sold at $71 per share on November 23.
a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank.
July 9 Treasury Stock
✓
Cash
Sept. 22 Cash
Nov. 23
Treasury Stock
✓
Paid-In Capital from Sale of Treasury Stock
Feedback
Cash
Paid-In Capital from Sale of Treasury Stock
✓
Treasury Stock
367,500
0
285,600
0
0
106,500
6,000
0
✓
0
367,500
c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
All of these reasons.
✓
0
228,000 X
57,600 X
0
0
112,500
Check My Work
The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is the company receiving? What is it
giving up? Keep in mind the price paid to buy the treasury stock and the price the shares are resold for at a later date.
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
51,600 X Credit
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