Treasury Stock (Alternate is 10-57.) Capetown Company has the following [in rands (R), the South African unit of currency]: Common stock, 2,000,000 shares @R3 par R 6,000,000 Paid-in capital in excess of par Total paid-in capital Retained income Stockholders' equity Overall market value of stock assumed R40 Book value per share + 2,000,000 - R29 R58,000,000 34,000,000 R40,000,000 18,000,000 R58,000,000 R80,000,000 1. The company used cash to reacquire 100,000 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.

Shareholders' Equity 3. Suppose all the treasury stock is sold for R30 per share. Prepare the journal entry. 4. Recalculate book value after each preceding transaction.