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.