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.
B. Open accounts for (1) Pain-in Capital from Treasury Stock, (2) Treasury Stock, and (3) Retained Earnings. Post to these accounts using J10 as the posting reference. (B- Treasury STock should be $8,000).
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