Question

On June 8, Covington Ltd was incorporated and issued 57,000 common shares for $342,000. On August 19, an additional 14,250 shares were issued for $99,750. On November 2, the company paid $37,700 to reacquire 6,500 common shares and on December 7 it paid $57,000 to reacquire 7,600 common shares.

Calculate the average cost of the common shares on June 8, August 19, November 2, and December 7. (Round answers to 2 decimal places, e.g. 15.25.)

		Average Cost
June 8		$
Aug. 19		$
Nov. 2		$
Dec. 7		$

List of Accounts

  

  

Prepare the journal entries to record the above transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
June 8Aug. 19Nov. 2Dec. 7
June 8Aug. 19Nov. 2Dec. 7
June 8Aug. 19Nov. 2Dec. 7
Dec. 7

Answer 1

Average Cost	Amount $
Jun-08	6.00	(342,000 / 57,000 )
Aug-19	7.00	(99,750 / 14,250 )
Nov-02	5.80	(37,700 / 6,500 )
Dec-07	7.50	(57,000 / 7,600 )

Date	Account Titles and Explanation	Debit $	Credit $
Jun-08	Cash	342,000
	Common Shares		342,000
Aug-19	Cash	99,750
	Common Shares		99,750
Nov-02	Treasury Shares	37,700
	Cash		37,700
Dec-07	Treasury Shares	57,000
	Cash		57,000