1. Treasury Stock Transactions

   Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 5,400 shares of its The stock outstanding when a corporation has issued only one class of stock.common stock at $56 per share. On September 22, Mystic Lake sold 3,800 of the reacquired shares at $63 per share. The remaining 1,600 shares were sold at $53 per share on November 23.

   a. Journalize the transactions of July 9, September 22, and November 23. If an amount box does not require an entry, leave it blank.

   July 9	Treasury Stock Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_2	fill in the blank d47b95058019fd5_3
   	Cash Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_5	fill in the blank d47b95058019fd5_6
   Sept. 22	Cash Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_8	fill in the blank d47b95058019fd5_9
   	Treasury Stock Cash Common Stock Preferred Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_11	fill in the blank d47b95058019fd5_12
   	Paid-In Capital from Sale of Treasury Stock Cash Common Stock Paid-In Capital from Sale of Treasury Stock Preferred Stock Retained Earnings	fill in the blank d47b95058019fd5_14	fill in the blank d47b95058019fd5_15
   Nov. 23	Cash Cash Common Stock Preferred Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_17	fill in the blank d47b95058019fd5_18
   	Paid-In Capital from Sale of Treasury Stock Common Stock Paid-In Capital from Sale of Treasury Stock Paid-In Capital in Excess of Par-Common Stock Preferred Stock Retained Earnings	fill in the blank d47b95058019fd5_20	fill in the blank d47b95058019fd5_21
   	Treasury Stock Cash Common Stock Paid-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock	fill in the blank d47b95058019fd5_23	fill in the blank d47b95058019fd5_24

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   The repurchase of shares, known as treasury stock, is typically recorded using the cost method. When the treasury stock is resold, what is the company receiving? What is it giving up? Keep in mind the price paid to buy the treasury stock and the price the shares are resold for at a later date.

   b. What is the balance in Capital contributed to a corporation by the stockholders and others.Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? $fill in the blank 273c0ffc2fda076_1

   Credit
   • Debit
   • Credit

   c. For what reasons might Mystic Lake Inc. have purchased the treasury stock? All of these reasons.

   • To support the market price of the stock.
   • To provide shares for resale to employees.
   • For reissuance to employees as a bonus according to stock purchase agreements.
   • None of these reasons.
   • All of these reasons.