P15-5 (LO2) Treasury StockCost Method

Before Gordon Corporation engages in the treasury stock transactions listed below, its general ledger reflects, among others, the following account balances and par value.

Paid-in Capital in Excess of Par - Common Stock

$ 99,000

Common Stock

$ 270,000

Retained Earnings

$ 80,000

Par value of common stock

$ 30.00

per share

Instructions:

Record the treasury stock transactions (given below) under the cost method of handling treasury stock; use the FIFO method for purchase-sale purposes.

(a)

Purchase of treasury stock

Number of shares

380

Cost per share

$ 40.00

(b)

Purchase of treasury stock

Number of shares

300

Cost per share

$45.00

(c)

Sale of treasury stock

Number of shares

350

Price per share

$ 42.00

(d)	Sale of treasury stock
		Number of shares		110
		Price per share		$ 38.00