Question
Fechter Corporation had the following stockholders equity accounts on January 1, 2017: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of ParCommon Stock $200,000,
Fechter Corporation had the following stockholders equity accounts on January 1, 2017: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of ParCommon Stock $200,000, and Retained Earnings $100,000. In 2017, the company had the following treasury stock transactions.
Mar. | 1 | Purchased 5,000 shares at $8 per share. | |
June | 1 | Sold 1,000 shares at $12 per share. | |
Sept. | 1 | Sold 2,000 shares at $10 per share. | |
Dec. | 1 | Sold 1,000 shares at $7 per share. |
Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $30,000.
Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2017, for net income.
List of Accounts that can be used
Accounts Receivable Cash Common Stock Equipment Income Summary Inventory Land Organization Expense Paid-in Capital from Treasury Stock Paid-in Capital in Excess of Par-Common Stock Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Stated Value-Common Stock Patents Preferred Stock Retained Earnings Share Capital-Ordinary Share Capital-Preference Share Premium-Ordinary Share Premium-Preference Treasury Stock
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started