Treasury Stock

The Stockholders' Equity section of Tipton Corporation's balance sheet on January 1, 2017, 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. Identify and analyze the effect of each transaction.

The following transactions occurred during 2017: a. Reacquired 1,800 shares of common stock at $20 per share on July 1.

Activity
Accounts
Statement(s)

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

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b. Reacquired 500 shares of common stock at $18 per share on August 1.

Activity
Accounts
Statement(s)

How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign.

Stockholders'

Net

Assets

=

Liabilities

+

Equity

Revenues

Expenses

=

Income

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2. Assume that the company resold the shares of treasury stock at $28 per share on October 1. The resale price of the treasury stock is $64,400, which when compared to its original cost, yielded _______ in the amount of _______2. This is shown on the balance sheet as a(n) ___________ in the _________ account.