Answer:
See the explanation below:
Explanation:
1. Prepare journal entries to record the following transactions for Sherman Systems
a. Purchased 5,500 shares of its own common stock at $30 per share on October 11.
<u>Details                                                            Dr ($)               Cr ($)   </u>
Treasury Stock (5,500 × 30)                         165,000
Cash                                                                                      165,000
<u><em>To record the repurchase of own common stock                            </em></u>
b. Sold 1,125 treasury shares on November 1 for $36 cash per share. 
<u>Details                                                            Dr ($)               Cr ($)     </u>
Cash (1,125 × 36)                                            40,500
Treasury Stock (1,125 × 30)                                                  33,750
Paid-in Capital from Sale of Treasury Stock                        6,750
<em><u>To record the sale of treasury stock.                                                      </u></em>
c. Sold all remaining treasury shares on November 25 for $25 cash per share. 
<u>Details                                                                Dr ($)               Cr ($)     </u>
Cash (4,375 × 25)                                                109,375
Paid-in Capital from Sale of Treasury Stock       6,750
Retained Earnings                                                15,125
Treasury Stock 99,000 (4,375 × 30)                                       131,250
<em><u>
To record the sale of the remaining treasury shares                               </u></em>
Kindly note that there is a balance of $6,750 in the Treasury Stock Paid-in Capital account. Since it is utilized, the remaining deficit will show in Retained Earnings. 
2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.
<u>Details                                                                                            $     </u>
77,000 issued authorized common stock–$10 par value    770,000 
Paid-in capital in excess of par value, common stock           241,000 
Retained earnings                                                                    904,000 
Treasury stock                                                                        <u> (165,000)</u>
Total stockholders’ equity                                                      <u>1,750,000</u>