Treasury Stock

The Stockholders' Equity category of Bradford Company's balance sheet on January 1, 2016, appeared as follows:

Common stock, $10 par, 10,000 shares issued and outstanding	$100,000
Additional paid-in capital	50,000
Retained earnings	80,000
Total stockholders equity	$230,000

Required:

1. Record the entries.

The following transactions occurred during 2016: a. Reacquired 1,000 shares of common stock at $20 per share on July 1. Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

Journal

Balance Sheet

Income Statement

Stockholders

Net

Date

Description

Debit

Credit

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

July 1

b. Reacquired 850 shares of common stock at $18 per share on August 1. Indicate the effect on financial statement items by selecting "" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement.

Journal

Balance Sheet

Income Statement

Stockholders

Net

Date

Description

Debit

Credit

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

Aug. 1

2. Assume that the company resold the shares of treasury stock at $28 per share on October 1.

(excess of selling price over cost , excess of cost over selling price, ) (excess or "gain", deficiency or "loss") (Increase, decrease) (common stock additional paid-in capital - treasury stock, additional paid-in capital -preferred stock)

The resale price of the treasury stock is $51,800, which when compared to its original cost, yielded ______ in the amount of $______. This______ is shown on the balance sheet as a(n)______ in the _______ account.