Question

SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 16,900 shares of its common stock at $23 per share. On June 9, 10,600 of the reacquired shares were sold at $25 per share, and on November 13, 4,100 of the reacquired shares were sold at $25.
Required:
Journalize the transactions of March 9, June 9, and November 13.

Answer 1

Answer:

Date                        Account Title                                     Debit             Credit

Mar 9                      Treasury Stock                               $388,700

                               Cash                                                                     $388,700

Working:

Treasury stock = 16,900 * 23 = $388,700

Date                        Account Title                                     Debit             Credit

June 9                    Cash                                                $265,000  

                              Treasury Stock                                                      $243,800  

                              Additional Paid-in capital -                                   $21,200

                              Treasury stock.

Working:

Cash = 10,600 * 25 = $265,000

Treasury stock = 10,600 * 23 = $243,800

Date                        Account Title                                     Debit              Credit

Nov 13                    Cash                                                $102,500

                              Treasury Stock                                                      $  94,300  

                              Additional Paid-in capital -                                   $  8,200

                              Treasury stock.

Working:

Cash = 4,100 * 25 = $102,500

Treasury stock = 4,100 * 23 = $94,300