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5. Assume that on February 1 the company sold all of its treasury stock for $12 per share and paid a $5 broker's fee related to the sale. The entry to record this transaction, assuming use of the cost method to account for treasury stock, would be: a. Cash 43 Broker's Fee Expense 5 Treasury Stock 40 Other Comprehensive Income 8 43 b. Cash Treasury Stock Other Comprehensive Income 40 3 43 5 40 8 c. Cash Broker's Fee Expense Treasury Stock Gain on Sale of Treasury Stock d. Cash Treasury Stock Paid-In Capital - Treasury Stock e. None of the above 43 40 3 6. Assume that on March 1 the company paid $7 per share (cash) to purchase 10 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: 20 10 50 80 a. Treasury Stock Broker's Fee Expense Other Comprehensive Income Cash b. Treasury Stock Paid in Capital - Treasury Stock Cash 20 60 80 c. Treasury stock Paid in Capital - Treasury Stock Cash 70 10 80 d. Treasury stock Retained Earnings Cash 70 10 80 e. None of the above. 5 On January 1, YR11 the Stockholders' Equity of Fry's Inc. was as follows all accounts have their normal balance). The company uses the cost method to account for treasury stock. Description Common Stock ($2 par) Paid in Capital - Common Stock Retained Earnings Treasury Stock (4 shares of common at cost) Amount $1,000 3000 600 40 7. Assume that on June 1 the company sold 6 of the treasury shares for $5 each, and paid a broker's fee of $5. The entry to record this transaction would be assume use of the cost method): a. Cash 25 Loss on Sale of Treasury Stock 23 Treasury Stock 48 b. Cash Broker's Fee Expense Loss on Sale of Treasury Stock Treasury Stock 25 5 18 48 25 3 20 48 c. Cash Paid in Capital - Treasury Stock Retained Earnings Treasury Stock d. Cash Broker's Fee Expense Paid in Capital - Treasury Stock Treasury Stock 25 5 18 48 e. None of the above