Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 39,300 shares of its common stock The stock outstanding when a corporation has issued only one class of stock. at $42 per share. On September 22, Mystic Lake sold 30,100 of the reacquired shares at $49 per share. The remaining 9,200 shares were sold at $41 per share on November 23. Required: a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles. b. What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders and others. from Sale of Treasury Stock on December 31 of the current year? c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? none X Chart of Accounts CHART OF ACCOUNTS Mystic Lake Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 236 Stock Dividends Distributable 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense none X Journal a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 . What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? Credit c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? Check all that apply. To support the market price of the stock. To provide shares for resale to employees. The company wishes to increase the par value of its stock. The company wishes to receive more of its own dividends. For reissuance to employees as a bonus according to stock purchase agreements.

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 39,300 shares of its common stock The stock outstanding when a corporation has issued only one class of stock. at $42 per share. On September 22, Mystic Lake sold 30,100 of the reacquired shares at $49 per share. The remaining 9,200 shares were sold at $41 per share on November 23. Required: a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles. b. What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders and others. from Sale of Treasury Stock on December 31 of the current year? c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? none X Chart of Accounts CHART OF ACCOUNTS Mystic Lake Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 236 Stock Dividends Distributable 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense none X Journal a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles. PAGE 10 JOURNAL ACCOUNTING EQUATION JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 . What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? Credit c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? Check all that apply. To support the market price of the stock. To provide shares for resale to employees. The company wishes to increase the par value of its stock. The company wishes to receive more of its own dividends. For reissuance to employees as a bonus according to stock purchase agreements.

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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Question

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 39,300 shares of its common stock

The stock outstanding when a corporation has issued only one class of stock.

at $42 per share. On September 22, Mystic Lake sold 30,100 of the reacquired shares at $49 per share. The remaining 9,200 shares were sold at $41 per share on November 23.

Required:

	a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
	b. What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders and others. from Sale of Treasury Stock on December 31 of the current year?
	c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?

none

Chart of Accounts

CHART OF ACCOUNTS

Mystic Lake Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
236	Stock Dividends Distributable
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense

none

Journal

a. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8

. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

Credit

c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? Check all that apply.

To support the market price of the stock.

To provide shares for resale to employees.

The company wishes to increase the par value of its stock.

The company wishes to receive more of its own dividends.

For reissuance to employees as a bonus according to stock purchase agreements.

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