Question

Cal Cookie Company (CCC) has 100 million shares of $1 par common stock authorized. The transactions below caused changes in CCC's outstanding shares.

January		4, 2018:		Repurchased and retired 2.40 million shares at $7.60 per share.
June		25, 2018:		Repurchased and retired 3.40 million shares at $3.40 per share.

Prior to the transactions, CCC's shareholders' equity included the following:

Common stock, 79.60 million shares at $1 par	$	79,600,000
Paid-in capital - excess of par		270,640,000
Retained earnings		116,000,000

Required:
Prepare the journal entry to record the repurchase and retirement of the shares. (Do not round your per share amounts. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

show work.

Answer 1

SOLUTION

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Jan.4	Common capital (2.40 million * $1 per share)	2,400,000
	Paid in capital excess of par (2.40 million * $3.4)	8,160,000
	Retained earnings (balance)	7,680,000
	Cash (2.40 million * $7.60)		18,240,000
June 25	Common capital (3.40 million * $1 per share)	3,400,000
	Paid in capital excess of par (3.40 million * $3.40)	1,560,000
	Cash (3.40 million * $3.40)		1,560,000
	Retained earnings (balance)		3,400,000

*270,640,000 / 79,600,000 = 3.4