Explanation Treasury Stock : It refers to the shares that are reacquired by the corporation that are already issued to the stockholders, but reacquisition does not signify retirement. Record the purchase of 75,000 shares of its own stock at $8 per share. Date Account Titles and Explanation Debit ($) Credit ($) May 27 Treasury Stock ( 75,000 shares × $8 per share ) 600,000 Cash 600,000 (To record purchase of treasury stock) Table (1) Treasury stock is contra- stockholders’ equity account with a normal debit balance. Thus, when treasury stocks are purchased, it decreases the stockholders’ equity account. In this case, it reduces the stockholders’ equity by $600,000. Therefore, treasury stock account is debited with $600,000. Cash is an asset. It is decreased as cash is paid for the purchase of treasury stock. Therefore, the cash account is credited with $600,000. Treasury stock does not affect the net income, as the net income would be affected by change in revenues and expenses. Record the resale of 54,000 shares of treasury stock for cash at $11 per share. Date Account Titles and Explanation Debit ($) Credit ($) August 3 Cash ( 54,000 shares × $11 per share ) 594,000 Treasury stock ( 54,000 shares × $8 per share ) 432,000 Paid-in capital from treasury stock ( 594 , 000 − $ 432 , 000 ) 162,000 (To record sale of treasury stock for above the cost price) Table (2) Cash is an asset

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Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The sto…

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Journalize the transactions of May 27, August 3, and November 14.

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Ch. 13 - Of two corporations organized at approximately the...Ch. 13 - A stockbroker advises a client to buy preferred...Ch. 13 - A corporation with both preferred stock and common...Ch. 13 - An owner of 2,500 shares of Simmons Company common...Ch. 13 - Prob. 5DQ Ch. 13 - A corporation reacquires 60,000 shares of its own...Ch. 13 - The treasury stock in Discussion Question 7 is...Ch. 13 - What are the three classifications of restrictions...Ch. 13 - Prob. 9DQ Ch. 13 - What is the primary purpose of a stock split?

Ch. 13 - National Furniture Company has 25,000 shares of...Ch. 13 - Prob. 1PEB Ch. 13 - On August 26, Mountain Realty Inc. issued for cash...Ch. 13 - Entries for issuing stock On January 22, Zentric...Ch. 13 - The declaration, record, and payment dates in...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Olde Wine Corporation has 250,000 shares of 40 par...Ch. 13 - Entries for stock dividends Antique Buggy...Ch. 13 - Prob. 5PEA Ch. 13 - Prob. 5PEB Ch. 13 - Using the following accounts and balances, prepare...Ch. 13 - Prob. 6PEB Ch. 13 - Prob. 7PEA Ch. 13 - Prob. 7PEB Ch. 13 - Prob. 8PEA Ch. 13 - Prob. 8PEB Ch. 13 - Triple Z Inc., a developer of radiology equipment,...Ch. 13 - Dividends per share Lightfoot Inc., a software...Ch. 13 - On April 20, Gallatin County Rocks Inc., a marble...Ch. 13 - On May 15, Helena Carpet Inc., a carpet...Ch. 13 - On July 11, American Lift Corporation, a...Ch. 13 - Prob. 6E Ch. 13 - Issuing stock Willow Creek Nursery, with an...Ch. 13 - Occupational Products Inc., a wholesaler of office...Ch. 13 - Entries for cash dividends The declaration,...Ch. 13 - Entries for stock dividends Senior Life Co. is an...Ch. 13 - Mystic Lake Inc. bottles and distributes spring...Ch. 13 - Prob. 12E Ch. 13 - Treasury stock transactions Biscayne Bay Water...Ch. 13 - Reporting paid-in capital The following accounts...Ch. 13 - Stockholders Equity section of balance sheet The...Ch. 13 - Stockholders Equity section of balance sheet...Ch. 13 - Sumter Pumps Corporation, a manufacturer of...Ch. 13 - Stockholders Equity section of balance sheet List...Ch. 13 - The stockholders equity T accounts of I-Cards Inc....Ch. 13 - Prob. 20E Ch. 13 - Prob. 21E Ch. 13 - Selected dividend transactions, stock split...Ch. 13 - Prob. 23E Ch. 13 - Pacific Gas and Electric Company is a large gas...Ch. 13 - For a recent year, OfficeMax and Staples are two...Ch. 13 - Sunbird Theatre Inc. owns and operates movie...Ch. 13 - Stock transactions for corporate expansion On...Ch. 13 - The following selected accounts appear in the...Ch. 13 - Morrow Enterprises Inc. manufactures bathroom...Ch. 13 - Selected transactions completed by Primo Discount...Ch. 13 - Prob. 1PB Ch. 13 - Prob. 2PB Ch. 13 - Selected stock transactions Diamondback Welding ...Ch. 13 - Nav-Go Enterprises Inc. produces aeronautical...Ch. 13 - Prob. 5PB Ch. 13 - Prob. 1CP Ch. 13 - Prob. 2CP Ch. 13 - Prob. 3CP Ch. 13 - Prob. 4CP Ch. 13 - Prob. 5CP

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