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15 January, 15:26

SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 12,000 shares of its common stock at $38 per share. On June 9, 7,600 of the reacquired shares were sold at $41 per share, and on November 13, 2,900 of the reacquired shares were sold at $41. 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?

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  1. 15 January, 16:57
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    a.

    March 9

    Dr Treasury Stock - Common stock 456,000

    Cr Cash 456,000

    (to record the reacquired of 12,000 common stock at $38 each)

    June 9

    Dr Cash 311,600

    Cr Treasury stock 288,800

    Cr Paid-in capital 22,800

    (to record the sell of 7,600 reacquired common stocks at $41 each)

    November 13

    Dr Cash 118,900

    Cr Treasury stock 110,200

    Cr Paid-in capital 8,700

    (to record the sell of 2,900 reacquired common stocks at $41 each)

    b.

    The balance of paid-in capital from sales of treasury stock = 8,700 + 22,800 = 31,500 Credit

    Explanation:

    Calculation notes:

    a.

    March 9: The cash spent on reacquired common stock = 12,000 x 38 = $456,000

    June 9: Cash receipt on sell of treasury common stock = 7,600 x 41 = 311,600; which will Credited $288,800 into Treasury stock account (38 x 7,600) and Credited $22,800 ((41-38) x 7,600) into Paid-in capital account.

    Nov 13 : Cash receipt on sell of treasury common stock = 2,900 x 41 = 118,900; which will Credited $110,200 into Treasury stock account (38 x 2,900) and Credited $8,700 ((41-38) x 2,900) into Paid-in capital account.

    b. Calculation is shown above
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