Answer:
a.
The journal entry is as follows which is shown below:
b.
Balance in Treasury stock is $93,000
Explanation:
a.
The journal entries which is to be recorded as:
Shares repurchased for $30 per share:
Treasury Stock A/c....................Dr $120,000
Cash A/c.............................Cr $120,000
Shares resold for $32 per share:
Cash A/c.........................................................Dr $28,00
Treasury Stock A/c..............................................Cr $27,000
Paid in capital from Treasury Stock A/c........Cr $1,800
Working Note:
Treasury Stock = Number of shares × Rate per share
= 4,000 × $30
= $120,000
Cash = Number of shares × Rate per share
= 900 × $32
= $28,800
Treasury Stock = Number of shares × Rate per share
= 900 × $30
= $27,000
Paid in capital from Treasury Stock = Cash - Treasury Stock
= $28,800 - $27,000
= $1,800
b.
Balance in Treasury Stock is computed as:
Balance in Treasury stock = Purchase of treasury stock - Cost of treasury stock sold
= $120,000 - $27,000
= $93,000
