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7252569-MIdterm-1 (dragged) 54 - of $100,000 or $10 per...

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Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 15-20 ILLUSTRATION 15-2 ACCOUNTING FOR TREASURY SHARE TRANSACTIONS HTM Limited has the following shareholders' equity at September 30, 2004: Common shares, no par value, 100,000 shares authorized, 72,000 shares issued and outstanding $675,000 Contributed surplus from cancellation of shares 6,000 Contributed capital 681,000 Retained earnings 247,500 Total Shareholders' Equity $928,500 The following transactions took place in the last quarter of 2004: October 12 Purchased 10,000 shares from the estate of a deceased shareholder at a total cost
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Unformatted text preview: of $100,000, or $10 per share. The shares were not cancelled, but were held as treasury shares. October 29 Sold 3,000 of the treasury shares for $30,900. November 19 Sold 1,000 of the treasury shares for $9,000. December 27 Sold the remainder of the treasury shares for $50,000. Required: (a) Prepare journal entries to record the transactions indicated. (b) Prepare the shareholders' equity section of the October 31, 2004 balance sheet, assuming the company earned income of $2,500 during October....
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