Question

On January 2, 2018, the first year of operations, Brunswick Corp. issued 15,000 shares of $10 par value common stock for $15 per share.  On July 1, 2018, 2,000 of these shares were reacquired for $17 each. On September 1, 2018 Brunswick Corp. reissued 800 shares of its treasury stock for $23 per share. No other stock transactions occurred during the rest of fiscal year 2018. Use this information to determine the dollar amount that Brunswick will report on its fiscal year 2018 Balance Sheet for Paid in Capital Treasury Stock.

Answer 1

Answer :

Treasury stock are the shares which are repuchased by company from the market

The amount of shares repurchases are shown under treasury stock under stockholder's equity and is deducted from total stockholder's equity

Paid in capital treasury stock includes the amount in excess of purchase of price of shares when the treasury shares are resold by company

Calculation of balnce of paid in capital treasury stock

Paid in capital treasury stock = Treasury shares reissued*(Sale price of share-Purchase price of share

Paid in capital treasury stock = 800*($23 - $17)

Paid in capital treasury stock = 800*6

Paid in capital treasury stock = $4,800

Thus the dollar amount Brunswick corp will report on its fiscal year 2018 balance sheet for paid in capital treasury stock is $4,800

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