Question

Treasury Stock Transactions SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 62,000 shares of its common stock at $51 per share. On June 9, 48,000 of the reacquired shares were sold at $60 per share, and on November 13, 7,500 of the reacquired shares were sold at $54. a. Journalize the transactions of March 9, June 9, and November 13. If an amount box does not require an entry, leave it blank. Mar. 9 June 9 Nov. 13 b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year

Answer 1

Answer: Please see explanation column for answers.

Explanation:

a)Journal to record the  transactions of SprayCo Inc.

Date                 Account                                 Debit                 Credit

march 9   Treasury stock (62,000 x $51)  $3,162,000

           Cash                                                                            $3,162,000

June 9      Cash  (48,000 x $60)             $2,880.000

     Treasury stock (48,000 x $51)                                       $2,448,000    

Paid in Capital from sale of treasury stock                          $432,000  

 ($2,880.000- $2,448,000 )  

Nov 13      Cash  (7,500 x $54)                  $405.000

     Treasury stock (7,500 x $51)                                          $382,500    

Paid in Capital from sale of treasury stock                          $ 22,500

 ($405,000- $382,500 )

b)balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year =$432,000  form June 9 +   $ 22,500 from November 13 =$454,500