Greeve Corporation had the following stockholders' equity accounts on January 1. 2006: Common Stock (SI par) $400,000.
Question:
Greeve Corporation had the following stockholders' equity accounts on January 1.
2006: Common Stock (SI par) $400,000. Paid-in Capital in Excess of Par Value $500,000, and Retained Earnings SI 00.000. In 2006. the company had the following treasury stock transactions.
Mar. 1 Purchased 5.000 shares at $7 per share.
June 1 Sold 1.000 shares at S10 per share.
Sept. 1 Sold 2.000 shares at $9 per share.
Dec. 1 Sold 1.000 shares at $5 per share.
Greeve Corporation uses the cost method of accounting for treasury stock. In 2006. the company reported net income of $60,000.
Instructions
(a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2006. for net income.
(b) Open accounts for (1) Paid-in Capital from Treasury Stock. (2) Treasury Stock, and (3) Retained Earnings. Post to these accounts using J 12 as the posting reference.
(c) Prepare the stockholders' equity section for Greeve Corporation at December 31, 2006.
Step by Step Answer:
Financial Accounting Text Only
ISBN: 9780006575405
5th Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel