Question
Treasury Stock Analysis Ray Holt Corporation has retained you as a consultant on accounting policies and procedures. During 2013, the company engaged in a number
Treasury Stock Analysis
Ray Holt Corporation has retained you as a consultant on accounting policies and procedures. During 2013, the company engaged in a number of treasury stock transactions, having foreseen an opportunity to report its treasury stock as an asset and to recognize a profit in trading its own stock. The transactions were as follows:
1.)Reacquired 250 shares of its $10 par common stock at $18 per share. The shares had originally been issued at $21 per share.
2.)Reacquired 300 shares of its $10 par common stock at $22 per share. The shares had originally been issued at $21 per share.
3.)Reacquired 200 shares of its $100 par preferred stock at $140 per share. The shares had originally been issued at $170 per share.
4.)Sold all common treasury shares held at $23 per share.
5.)Reacquired 300 shares of its $100 par preferred stock at $130 per share. The shares had originally been issued at $170 per share.
6.)Retired all preferred shares held in the treasury.
Prepare an analysis of treasury stock accounting for Mr. Robert Richter, the controller. This analysis should contain proper journal entries for each of the treasury stock transactions occurring during 2013, prepared using the cost method discussed in the chapter. For a compound transaction, if an amount box does not require an entry, leave it blank.
* I only need help with 4 and 6.
(4)
cash | x | |
treasury stock: common | 11100 | |
additional paid in capital for treasury stock: common | x |
(6)
preferred stock, $100 par | x | |
additional paid in capital on preferred stock | x | |
treasury stock: preferred | 67000 | |
additional paid in capital from treasury stock: preferred | x |
please explain how you got your answer. thank you!
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