On July 1, Blue Spruce Corp. purchases 550 shares of its $5 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 200 shares of the treasury stock for cash at $12 per share. Journalize the two treasury stock transactions.

On July 1, Blue Spruce Corp. purchases 550 shares of its $5 par value common stock for the treasury at a cash price of $9 per share. On September 1, it sells 200 shares of the treasury stock for cash at $12 per share. Journalize the two treasury stock transactions.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 3CE: Prepare general journal entries for the following transactions of GOTE Company: (a) Received...

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

Definition Definition Stock repurchased from the stockholders by the company that once issued it. The repurchase of the stock reduces the stockholder's equity balance on the balance sheet. Treasury stocks are an important constituent of stockholder's equity but do not carry any voting rights.

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