Treasury Stock Transactions

SprayCo Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On March 9 of the current year, SprayCo reacquired 13,900 shares of its common stock at $44 per share. On June 9, 8,800 of the reacquired shares were sold at $47 per share, and on November 13, 3,300 of the reacquired shares were sold at $47.

a. Journalize the transactions of March 9, June 9, and November 13. If an amount box does not require an entry, leave it blank.

Mar. 9Treasury Stock

Cash

June 9Cash

Treasury Stock

Paid-In Capital from Sale of Treasury Stock

Nov. 13Cash

Treasury Stock

Paid-In Capital from Sale of Treasury Stock

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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 Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? $ Credit

c. What is the balance in Treasury Stock on December 31 of the current year? $ Debit

d. How will the balance in Treasury Stock be reported on the balance sheet? As a deduction from stockholders' equity