Question

Dunrite Moving Inc. (a) October 26th bought 13,000 treasurey stock at $19. DR Treasury Stock. 247,0000...

Dunrite Moving Inc.

(a) October 26th bought 13,000 treasurey stock at $19.

DR Treasury Stock. 247,0000

CR Cash 247,000

(Correct)

(b) October 29th, sold 3,000 of treasury stock for $21.

DR Cash 63,0000

CR Treasury Stock 57,000

CR Paid in Capital from Treasury Stock 6,0000

(Correct)

(6) November 12th, sold the balance of treasury stocks for $15.

DR Cash 150,000

DR Paid in Capital from Treasury Stock 40,000

CR Treasury Stock 190,000

DR Retained Earnings ?

(Incorrect)

Can you help me correct the last one? Thank you.

Business   Accounting   
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Homework Answers

Answer #1
  • November 12th entry is INCORRECT.
  • You need to pay attention that balance in “paid in Capital from Treasury Stock” is $ 6,000 after Oct 29th sale.
  • This Credit balance of $ 6000 is to be DEBITED.
  • Any other balancing difference will be adjusted against Retained earnings
  • Correct entry Nov 12th:
    [Debit] Cash $ 150,000 [10000 shares x $ 15]
    [Debit] paid in Capital from treasury Stock $ 6000 [credit balance existing]
    [Debit Retained Earnings $ 34,000 [$190000 – 150000 – 6000]
    [Credit] Treasury Stock $ 190,000 [1000 shares x $ 19 cost]
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