Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 24,200 shares of its common stock at $68 per share. On September 6, Biscayne Bay Water Inc. sold 12,500 of the reacquired shares at $74 per share. The remaining 11,700 shares were sold at $65 per share on November 30.

Required:

A.

Journalize the transactions of May 14, September 6, and November 30. 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.

Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?

D.

For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock?

CHART OF ACCOUNTS

Biscayne Bay Water Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise 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 B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? C. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet? D. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock? Check all that apply. To provide shares for resale to employees. The company wishes to receive more of its own dividends. The company wishes to increase the par value of its stock. For reissuance to employees as a bonus according to stock purchase agreements. To support the market price of the stock.

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise 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 May 14, September 6, and November 30. Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL DAT DESCRIPTION POST. REF. EB RED