P15-5 ans - 700 Cash (110 x $38) 4,180 Paid-in Capital from...

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P15-5 (Treasury Stock—Cost Method) Before Gordon Corporation engages in the treasury stock transactions listed below, its general ledger reflects, among others, the following account balances (par value of its stock is $30 per share). Paid-in Capital in Excess of Par Common Stock Retained Earnings $99,000 $270,000 $80,000 Instructions Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method and the par value method for purchase-sale purposes, also prepare a Statement of Stockholders' Equity for each method (a) Bought 380 shares of treasury stock at $40 per share. (b) Bought 300 shares of treasury stock at $45 per share. (c) Sold 350 shares of treasury stock at $42 per share. (d) Sold 110 shares of treasury stock at $38 per share. Solution: FIFO Method: Accounts Debits Credits Treasury Stock (380 x $40) 15,200 Cash 15,200 Treasury Stock (300 x $45) 13,500 Cash 13,500 Cash (350 x $42) 14,700 Treasury Stock (350 x $40) 14,000 Paid-in Capital from Treasury Stock
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Unformatted text preview: 700 Cash (110 x $38) 4,180 Paid-in Capital from Treasury Stock 620 Treasury Stock [(30 x $40) + (80 x $45)] 4,800 Statement of Stockholders' Equity Common Stock $270,000 Paid-in Capital in Excess of Par 99,000 Paid-in Capital from Treasury Stock 80 Retained Earnings 80,000 Less: Treasury Stock 9,900 Total Stockholders Equity $439,180 Par Value Method: Accounts Debits Credits Treasury Stock (380 x $30) 11,400 Paid-in capital in excess of par 3,800 Cash (380 x $40) 15,200 Treasury Stock (300 x $30) 9,000 Paid-in capital in excess of par 4,500 Cash (300 x $45) 13,500 Cash (350 x $42) 14,700 Treasury Stock (350 x $30) 10,500 Paid-in Capital in excess of par 4,200 Cash (110 x $38) 4,180 Treasury Stock (110 x $30)] 3,300 Paid-in Capital in excess of par 880 Statement of Stockholders' Equity Common Stock $270,000 Paid-in Capital in Excess of Par 95,780 Retained Earnings 80,000 Less: Treasury Stock 6,600 Total Stockholders Equity $439,180...
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This note was uploaded on 10/03/2011 for the course ACCOUNTING 103 taught by Professor Ngo during the Spring '11 term at University of California, Berkeley.

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P15-5 ans - 700 Cash (110 x $38) 4,180 Paid-in Capital from...

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