On January 1, 2020, the stockholders' equity section of Cheyenne Corp. shows common stock ($4 par value) $1,200,000; paid-in capital in excess of par $1,070,000; and retained earnings $1,220,000. During the year, the following treasury stock transactions occurred.

Mar. 1 Purchased 47,000 shares for cash at $15 per share.

July. 1 Sold 10,000 treasury shares for cash at $17 per share.

Sept. 1 Sold 8,500 treasury shares for cash at $14 per share.

a. Restate the entry for September 1, assuming the treasury shares were sold at $11 per share.

Question

Trey Harrington

Business

22 November, 15:21

On January 1, 2020, the stockholders' equity section of Cheyenne Corp. shows common stock ($4 par value) $1,200,000; paid-in capital in excess of par $1,070,000; and retained earnings $1,220,000. During the year, the following treasury stock transactions occurred.

Mar. 1 Purchased 47,000 shares for cash at $15 per share.

July. 1 Sold 10,000 treasury shares for cash at $17 per share.

Sept. 1 Sold 8,500 treasury shares for cash at $14 per share.

a. Restate the entry for September 1, assuming the treasury shares were sold at $11 per share.

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Answers (1)

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Luz Martinez · Answer 1

The Journal entries are as follows:

On September 1,

(a) Cash A/c [8,500 * $14] Dr. $119,000

Excess of paid in capital A/c [8,500 * $1] Dr. $8,500

To treasury stock $127,500

(To record the treasury shares for cash)

(b) Cash A/c [8,500 * $11] Dr. $93,500

Excess of paid in capital A/c Dr. $20,000

Retained earnings A/c Dr. $14,000

To Treasury stock $127,500

(To record the restate entry for September 1)