PART A

PART B

PART C

On January 1, YR08 the stockholders' equity of Sears Inc. was as follows (all accounts have their normal balances). The company uses the cost method to account for treasury stock. Assume that on May 1 the company paid $15 per share (cash) to purchase 5 shares of its own common stock to hold as treasury shares. Also assume the company paid a $10 broker's fee related to the purchase. The entry to record this transaction, assuming use of the cost method to account for treasury stock, would be: Assume that on October 1 the company sold 2 of the treasury shares for $22 each, and paid a broker's fee of $5. The entry to record this transaction would be (assume use of the cost method): Assume that on November 1 the company formally retired the remaining 3 treasury shares. To avoid carryforward errors also assume that the correct balances in stockholders' equity immediately prior to the retirement were as follows (all accounts have their normal balances): The entry to record the retirement transaction would be (use preferred method under GAAP)