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, 94,000 shares authorized, issued, and outstanding	$	940,000
Paid-in capital in excess of par value, common stock		326,000
Retained earnings		1,040,000
Total stockholders equity	$	2,306,000

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

1. Purchased 7,200 shares of its own common stock at $47 per share on October 11.
2. Sold 1,550 treasury shares on November 1 for $53 cash per share.
3. Sold all remaining treasury shares on November 25 for $42 cash per share.

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