Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Question
Chapter 12, Problem 12.16EX
A.
To determine
To prepare: The
B.
To determine
The balance in paid in capital from sale of treasury stock on December 31 of the current year.
C.
To determine
To discuss: The reason, for which Incorporation B has purchased the treasury stock.
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Treasury Stock Transactions
Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 2,300 shares of its common stock at $52
per share. On September 6, Biscayne Bay Water Inc. sold 1,800 of the reacquired shares at $55 per share. The remaining 500 shares were sold at $49 per share on
November 30.
a. Journalize the transactions of May 14, September 6, and November 30. If an amount box does not require an entry, leave it blank.
May 14
Sept. 6
Nov. 30
36
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
$
c. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?
d. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock?
Treasury Stock Transactions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year,
Mystic Lake reacquired 3,800 shares of its common stock at $91 per share. On
September 22, Mystic Lake sold 2,700 of the reacquired shares at $101 per share. The
remaining 1,100 shares were sold at $86 per share on November 23.
a. Journalize the transactions of July 9, September 22, and November 23. If an
amount box does not require an entry, leave it blank.
July 9
Sept. 22
UD
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31
of the current year?
Nov. 23
c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
Treasury Stock Transactions
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 4,900 shares of its common stock at $75 per share. On September 22,
Mystic Lake sold 3,400 of the reacquired shares at $84 per share. The remaining 1,500 shares were sold at $71 per share on November 23.
a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank.
July 9 Treasury Stock
✓
Cash
Sept. 22 Cash
Nov. 23
Treasury Stock
✓
Paid-In Capital from Sale of Treasury Stock
Feedback
Cash
Paid-In Capital from Sale of Treasury Stock
✓
Treasury Stock
367,500
0
285,600
0
0
106,500
6,000
0
✓
0
367,500
c. For what reasons might Mystic Lake Inc. have purchased the treasury stock?
All of these reasons.
✓
0
228,000 X
57,600 X
0
0
112,500
Check My Work
The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is…
Chapter 12 Solutions
Corporate Financial Accounting
Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Dividends per share Zero Calories Company has...Ch. 12 - Entries for issuing stock On January 22, Zentric...Ch. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Entries for treasury stock On May 27, Hydro...Ch. 12 - Reporting stockholders equity Using the following...Ch. 12 - Statement of stockholders equity None Cruises Inc....Ch. 12 - Earnings per share Financial statement data for...Ch. 12 - Preferred stock, 1st year 0.85 Dividends per share...Ch. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Issuing stock Professional Products Inc., a...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Healthy Life Co. is an...Ch. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Prob. 12.14EXCh. 12 - Treasury stock transactions SprayCo Inc. develops...Ch. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Stockholders Equity section of balance sheet List...Ch. 12 - Prob. 12.22EXCh. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Selected stock transactions The following selected...Ch. 12 - Prob. 12.4APRCh. 12 - Entries for selected corporate transactions...Ch. 12 - Common dividends in 20Y3: 25,000 Dividends on...Ch. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Prob. 12.4BPRCh. 12 - Entries for selected corporate transactions West...Ch. 12 - Comprehensive Problem 4 2. c. Total assets....Ch. 12 - Prob. 12.1MADCh. 12 - Analyze and compare Bank of America and Wells...Ch. 12 - Prob. 12.3MADCh. 12 - Prob. 12.4MADCh. 12 - Analyze and compare BBT and Regions Financial BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Ethics in Action Lou Hoskins and Shirley Crothers...Ch. 12 - Prob. 12.4TIF
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