Lava Lake Inc bottles and distributes spring water On February 11 of the current year, Lava Lake reacquired 39,300 shares of its common stock at $42 per share On April 30, Lava Lake Inc sold 30,100 of the reacquired shares at $49 per share On August 22, Lava Lake Inc sold 9,200 shares at $41 per share Required A Journalize the transactions of February 11, April 30, and August 22 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 For what reasons might Lava Lake have purchased the treasury stock Chart of Accounts CHART OF ACCOUNTS Lava Lake 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 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 350 Stock Dividends Distributable 351 Cash Dividends 352 Stock Dividends 390 Income Summary 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 February 11, April 30, and August 22 Refer to the Chart of Accounts for exact wording of account titles PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8 Final Questions B What is the balance in Paid In Capital from Sale of Treasury Stock on December 31 of the current year C For what reasons might Lava Lake have purchased the Treasury Stock Check all that apply The company wishes to receive more of its own dividends To provide shares for resale to employees For reissuance to employees as a bonus according to stock purchase agreements The company wishes to increase the par value of its stock To support the market price of the stock

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Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava Lake reacquired 39,300 shares of its common stock at

Lava Lake Inc. bottles and distributes spring water. On February 11 of the current year, Lava Lake reacquired 39,300 shares of its common stock at $42 per share. On April 30, Lava Lake Inc. sold 30,100 of the reacquired shares at $49 per share. On August 22, Lava Lake Inc. sold 9,200 shares at $41 per share.

Required:

A.	Journalize the transactions of February 11, April 30, and August 22. 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.	For what reasons might Lava Lake have purchased the treasury stock?

Chart of Accounts

CHART OF ACCOUNTS

Lava Lake 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
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
350	Stock Dividends Distributable
351	Cash Dividends
352	Stock Dividends
390	Income Summary

	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