Question

California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $17 per share.


Later in the year, the company decides to repurchase 100 shares at a cost of $20 per share.


Required:


Record the transaction if California Surf reissues the 100 shares of treasury stock at $22 per share.

Answer 1

Answer:

cash                     17,000 debit

   common stock         1,000 credit

   additional paid-in   16,000 credit

--to record issuance of shares--

treasury stock   2,000 debit

             cash                 2,000 credit

--to record purchase of treasury stock--

cash         2,200 debit

     treasury stock         2,000 credit

    additional paid-in TS   200 credit

--to record reissued shares on treasury stock--

Explanation:

1,000 x $17 = 17,000 cash collected

1,000 x $ 1 =    1,000 common stock

additional paid-in   16,000

treasury stock cost:

100 shares x $20 = 2,000

sold at $22 =           2,200

additional paid-in TS 200