Exercise 11-10 Recording and reporting treasury stock transactions LO P3

On October 10, the stockholders equity of Sherman Systems appears as follows.

Common stock$10 par value, 92,000 shares authorized, issued, and outstanding	$	920,000
Paid-in capital in excess of par value, common stock		316,000
Retained earnings		1,024,000
Total stockholders equity	$	2,260,000

1. Prepare journal entries to record the following transactions for Sherman Systems.

Purchased 7,000 shares of its own common stock at $45 per share on October 11.

Sold 1,500 treasury shares on November 1 for $51 cash per share.

Sold all remaining treasury shares on November 25 for $40 cash per share.

2. Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase.