Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 12.14EX
A.
To determine
To prepare: The
B.
To determine
The balance in paid in capital from sale of treasury stock on December 31 of the current year.
C.
To determine
To discuss: The reason, for which Incorporation M has purchased the treasury stock.
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Treasury Stock Transactions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 7,200 shares of its common stock at $53 per share. On September 22, Mystic Lake sold 5,000 of the reacquired shares at $59 per share. The remaining 2,200 shares were sold at $50 per share on November 23.
a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank.
July 9
Sept. 22
Nov. 23
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?$
c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
Treasury Stock Transactions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 5,100 shares of its common stock at $64 per share. On September 22, Mystic Lake sold 3,600 of the reacquired shares at $72 per share. The remaining 1,500 shares were sold at $61 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
fill in the blank 542892fd3fd6014_2
fill in the blank 542892fd3fd6014_3
Cash
fill in the blank 542892fd3fd6014_5
fill in the blank 542892fd3fd6014_6
Sept. 22
Cash
fill in the blank 542892fd3fd6014_8
fill in the blank 542892fd3fd6014_9
Treasury Stock
fill in the blank 542892fd3fd6014_11
fill in the blank 542892fd3fd6014_12
Paid-In Capital from Sale of Treasury Stock
fill in the blank 542892fd3fd6014_14
fill in the blank 542892fd3fd6014_15
Nov. 23
Cash
fill in the…
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
✓
168,000 X
Sept. 22 Cash
✓
Treasury Stock
✓ ✓
Paid-In Capital from Sale of Treasury Stock
Nov. 23 Cash
Paid-In Capital from Sale of Treasury Stock
Feedback
Treasury
Stock
Stock
✓
196,500 X
0 ✓
285,600 ✔
0 ✓
0
106,500
0
✓
1,500 X
> x
c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
All of these reasons.
0
0 ✓
252,000 X
10,200 X
0
0
106,500 X
Check My Work
The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the…
Chapter 12 Solutions
Corporate Financial Accounting
Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Alpine Energy...Ch. 12 - Prob. 12.5BECh. 12 - Reporting stockholders equity Using the following...Ch. 12 - Retained earnings statement Noric Cruises Inc....Ch. 12 - Dividends per share Seventy-Two Inc., a developer...Ch. 12 - Prob. 12.2EXCh. 12 - Entries for issuing par stock On January 22,...Ch. 12 - Prob. 12.4EXCh. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Issuing stock Professional Products Inc., a...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Healthy Life Co. is an...Ch. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Prob. 12.14EXCh. 12 - Treasury stock transactions SprayCo Inc. develops...Ch. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Stockholders Equity section of balance sheet List...Ch. 12 - Prob. 12.22EXCh. 12 - Dividends on preferred and common stock Pecan...Ch. 12 - Prob. 12.2APRCh. 12 - Stock transactions for corporate expansion On...Ch. 12 - Entries for selected corporate transactions Morrow...Ch. 12 - Entries for selected corporate transactions...Ch. 12 - Prob. 12.1BPRCh. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Entries for selected corporate transactions Nav-Go...Ch. 12 - Entries for selected corporate transactions West...Ch. 12 - Selected transactions completed by Equinox...Ch. 12 - Prob. 12.1ADMCh. 12 - Prob. 12.2ADMCh. 12 - Prob. 12.3ADMCh. 12 - BBT and Regions Financial: Earnings per share BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Prob. 12.3TIF
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