Question

Angelo Company reacquired 26,000 shares of its common stock for $16 per share on June 1. On July 1 they sold 7,000 treasury shares for $23 per share. On August 1 they sold 9,000 treasury shares for $13 per share. Assuming no prior balance in the Additional Paid-in Capital from Treasury Stock Transactions account, what is the ending balance in this account following these transactions

Answer 1

Answer:

$22,000 Credit balance

Explanation:

Calculation to determine the ending balance

First step is prepare the Journal entries

Dr Treasury stock $416,000

Cr Cash $416,000

(26,000 shares*$16 per share)

Dr Cash $161,000

(7,000*$23)

Cr Teasury stock $112,000

($16 per *7,000)

Cr Additional Paid-in Capital $49,000

($161,000-$112,000)

Dr Cash $117,000

(9,000*$13)

Dr Additional Paid-in Capital $27,000

($144,000-$117,000)

Cr Teasury stock $144,000

($16*9,000)

Now let calculate the Ending balance

Ending balance=-$49,000+$27,000

Ending balance=-$22,000 Credit balance

Therefore the Ending balance is $22,000 Credit balance