Johannesburg Company has the following [in rands (R), the South African unit of currency]:

Common stock, 2,000,000 shares, R3 par value ......... R 6,000,000

Paid-in capital in excess of par ............... 34,000,000

Total paid-in capital .................... 40,000,000

Retained income ...................... 18,000,000

Stockholders’ equity ...................R58,000,000

Overall market value of stock @ assumed market price of

R40 per share ....................... R80,000,000

Book value per share = R58,000,000 ÷ 2,000,000 = R29

1. The company used cash to reacquire 150,000 shares for R40 each and held them in the treasury. Prepare the stockholders’ equity section after the acquisition of treasury stock. Also prepare the journal entry.

2. Suppose all the treasury stock is sold for R50 per share. Prepare the journal entry.

3. Suppose all the treasury stock is sold for R30 per share. Prepare the journal entry.

4. Recalculate book value after each preceding transaction.