Question

Prepare journal entries to record the following transactions for Sherman Systems. Purchased 6,000 shares of its own common stock at $35 per share on October 11. Sold 1,250 treasury shares on November 1 for $41 cash per share. Sold all remaining treasury shares on November 25 for $30 cash per share. 2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.

Answer 1

Answer:

Revised Equity Section of Balance Sheet After October 11

                                                                                                         

Common Stock at par                                                 $820,000

Paid-in capital in excess of Par                                  $266,000

Total Contributed Capital                                        $1,086,000

Retained earnings                                                    $  944,000

Total                                                                          $2,030,000

Less: Treasury Stock                                               ($  210,000)

Total Stockholder's Equity                                      $1,820,000

Treasury stock = 6,000 * 35

= $210,000