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8 May, 14:07

California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to Purchase 100 shares at a cost of $35 per share. Record the transaction if California Surf resells the 100 shares of treasury stock at $37 per share

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  1. 8 May, 14:24
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    Debit = $3,700

    Credit = $200

    Credit = $3,500

    Explanation:

    The following transactions are recorded in California Surf clothing company

    1) Cash debit is acquired through the reissuance of 100 shares of treasury stock at the rate of $37 per share

    = $37 per share * 100 shares

    = $3,700

    2) Credit from the additional paid in capital

    = $37 per share - $35 per share

    = $2 per share * 100 shares

    = $200

    3) Credit gotten from the required stock

    = $3,700 - $200

    = $3,500
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