B what is the balance in paid in capital from sale of

b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of
the current year?
c. For what reasons might Lava Lake have purchased the treasury stock?
9. Treasury Stock Transactions
Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current
year, Biscayne Bay Water Inc. reacquired 2,400 shares of its common stock at $57 per
share. On September 6, Biscayne Bay Water Inc. sold 1,800 of the reacquired shares at
$61 per share. The remaining 600 shares were sold at $54 per share on November 30.
a. Journalize the transactions of May 14, September 6, and November 30. For a compound
transaction, if an amount box does not require an entry, leave it blank.

May
14
Treasury Stock 136800
Cash 136800
Sept.
6
Cash 109800
Treasury Stock 102600
Paid-in Capital from Sale of
Treasury Stock
7200
Nov.
30
Cash 32400
Paid-in Capital from Sale of
Treasury Stock
1800
Treasury Stock 34200
The repurchase of shares, known as treasury stock, is typically recorded using the
cost method. When the treasury stock is resold, what is the company receiving? What
is it giving up? Keep in mind the price paid to buy the treasury stock and the price the
shares are resold for at a later date.
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the
current year?
c. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the
d. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock? Consider what entries might have affected the value of the paid-in capital account.
Review why companies may repurchase their stock.
10.Reporting Paid-In Capital
The following accounts and their balances were selected from the adjusted trial balance
of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal
year:
Common Stock, no par, $14 stated value $560,000
Paid-In Capital from Sale of Treasury Stock 344,600
Paid-In Capital in Excess of Par—Preferred Stock 103,680