Question

6.    Prepare the entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation. These transactions represent all treasury stock transactions entered into by the company. (Omit explanations) show work

June	1		Purchased 5,000 shares of its own $30 par value common stock for $80 per share, the current market price.
	10		Sold 500 shares of treasury stock purchased on June 1 for $80 per share
	20		Sold 700 shares of treasury stock purchased on June 1 for $58 per share.
	30		Retire the balance of treasury stock, assuming the original average issuing price was $48 per share (use the par value method)

Answer 1

Solution:

Journal Entries
Date	Particulars	Debit	Credit
01-Jun	Treasury Stock Dr (5000*$80)	$4,00,000
	To Cash		$4,00,000
10-Jun	Cash Dr	$40,000
	To Treasury Stock (500*$80)		$40,000
20-Jun	Cash Dr (700*$58)	$40,600
	Retained earnings Dr	$15,400
	To Treasury Stock (700*$80)		$56,000
30-Jun	Common Stock Dr (3800*$30)	$1,14,000
	Retained earnings Dr	$1,90,000
	To Treasury Stock (3800*$80)		$3,04,000