SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 62,000 shares of its common stock at $51 per share. On June 9, 48,000 of the reacquired shares were sold at $60 per share, and on November 13, 7,500 of the reacquired shares were sold at $54.
Required:
a. Journalize the transactions of March 9, June 9, and November 13. Refer to the Chart of Accounts for exact wording of account titles. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? c. What is the balance in Treasury Stock on December 31 of the current year? d. How will the balance in Treasury Stock be reported on the balance sheet?
Chart of Accounts
CHART OF ACCOUNTS SprayCo Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment
LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable
EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary
REVENUE 410 Sales 610 Interest Revenue
EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense
Journal
a. Journalize the transactions of March 9, June 9, and November 13. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1
2
3
4
5
6
7
8
Final Questions
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
c. What is the balance in Treasury Stock on December 31 of the current year?
d. How will the balance in Treasury Stock be reported on the balance sheet?
SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 62,000 shares of its common stock at $51 per share. On June 9, 48,000 of the reacquired shares were sold at $60 per share, and on November 13, 7,500 of the reacquired shares were sold at $54.
Required:
| a. Journalize the transactions of March 9, June 9, and November 13. Refer to the Chart of Accounts for exact wording of account titles. | |
| b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? | |
| c. What is the balance in Treasury Stock on December 31 of the current year? | |
| d. How will the balance in Treasury Stock be reported on the balance sheet? |
Chart of Accounts
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SprayCo Inc. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Journal
a. Journalize the transactions of March 9, June 9, and November 13. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | ASSETS | LIABILITIES | EQUITY | |
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| 1 | ||||||||
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Final Questions
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
c. What is the balance in Treasury Stock on December 31 of the current year?
d. How will the balance in Treasury Stock be reported on the balance sheet?
Related questions
On March 4 of the current year, Barefoot Bay, Inc. reacquired 5,000 shares of its common stock at $89 per share. On August 7, Barefoot Bay sold 3,500 of the reacquired shares at $100 per share. The remaining 1,500 shares were sold at $88 per share on November 29.
1. Journalize the transactions of March 4, August 7, and November 29. If an amount box does not require an entry, leave it blank or enter "0".
| Mar. 4 | |||
| Aug. 7 | |||
| Nov. 29 | |||
2. What is the balance in Paid-in Capital from Sale of Treasury Stock on December 31 of the current year?
$
Lawn Smart Inc. develops and produces spraying equipment forlawn maintenance and industrial uses. On May 29 of the currentyear, Lawn Smart Inc. reacquired 19,100 shares of its commonstock
The stock outstanding when a corporation has issued only oneclass of stock.
at $20 per share. On August 11, 13,700 of the reacquired shareswere sold at $25 per share, and on October 30, 4,000 of thereacquired shares were sold at $21.
Required:
| A. | Journalize the transactions of May 29, August 11, and October30. Refer to the Chart of Accounts for exact wording of accounttitles. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. | What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders andothers. from Sale of Treasury Stock on December 31 of the currentyear? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. | What is the balance in Treasury Stock on December 31 of thecurrent year? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| D. | How will the balance in Treasury Stock be reported on thebalance sheet? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mystic Lake Inc. bottles and distributes spring water. On July 9of the current year, Mystic Lake reacquired 39,500 shares of itscommon stock
The stock outstanding when a corporation has issued only oneclass of stock.
at $42 per share. On September 22, Mystic Lake Inc. sold 30,100of the reacquired shares at $51 per share. The remaining 9,400shares were sold at $41 per share on November 23.
Required:
| A. | Journalize the transactions of July 9, September 22, andNovember 23. Refer to the Chart of Accounts for exact wording ofaccount titles. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. | What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders andothers. from Sale of Treasury Stock on December 31 of the currentyear? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. | For what reasons might Mystic Lake have purchased the treasurystock? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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