Question

On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 95,000 shares authorized, issued, and outstanding $ 950,000 Paid-in capital in excess of par value, common stock 331,000 Retained earnings 1,048,000 Total stockholders’ equity $ 2,329,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 7,300 shares of its own common stock at $48 per share on October 11. Sold 1,575 treasury shares on November 1 for $54 cash per share. Sold all remaining treasury shares on November 25 for $43 cash per share.

Answer 1

Answer:

Date                Description                                               DR                   CR

                                                                                          $                     $

Oct 11             Treasury Stock                                        350,400

                       Cash                                                                         350,400

                      Being the purchse of teasury stock

Nov 1                Cash                                                     85,050

                         Paid in Capital from Treasury stock                      9,450

                          Treasury stock                                                       75,600

                       Being the cash realized on the sales of Treasury

                       stock above cost

Nov 25           Cash                                                             246,175

                      Paid in capital from Treasury stock                9,450

                      Retained earnings                                          19,175

                        Treasury Stock                                                           274,800

                    Being the sales of Treasury stock below the cost

Explanation: