Question

On January 1, 2017, the stockholders’ equity section of Pujols Corporation shows: Common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the following treasury stock transactions occurred. Mar. 1 Purchased 50,000 shares for cash at $17 per share. July 1 Sold 10,000 treasury shares for cash at $18 per share. Sept. 1 Sold 8,000 treasury shares for cash at $16 per share. Instructions (a) Journalize the treasury stock transactions. (b) Restate the entry for September 1, assuming the treasury shares were sold at $14 per share.

Answer 1

Answer:

                                           START   END  

(1) Common Stock  $ 1,500,000 $ 1,340,000

(2) Paid-in Capital in Excess of Par  $ 1,000,000 $ 602,000

(3)  Retained Earnings  $ 1,200,000 $ 1,200,000

(T)  TOTAL EQUITY  $ 3,700,000 $ 3,142,000

Explanation:

        March  1   July  1   Sept 1   Sept 1 Restate  

(1)    -$ 250,000 $ 50,000 $ 40,000  

(2)    -$ 600,000 $ 130,000 $ 88,000 -$ 16,000

(T) -$ 850,000 $ 180,000 $ 128,000 -$ 16,000

        START              END        Quantities   Price  

(1)  $ 1.500,000 $ 1.340,000  268.000   $5,00  

(2) $ 1.000,000 $ 602,000                   $2,25  

(3) $ 1.200,000 $ 1.200,000  

(T)  $ 3.700,000 $ 3.142,000 268.000