Question

Yard Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Yard Spray Inc. reacquired 19,200 shares of its common stock at $19 per share. On June 14, 13,600 of the reacquired shares were sold at $24 per share, and on November 23, 4,100 of the reacquired shares were sold at $20.

Required:

a.

Journalize the transactions of January 31, June 14, and November 23. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

c.

What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?

b.

What is the balance in Treasury Stock on December 31 of the current year?

d.

How will the balance in Treasury Stock be reported on the balance sheet?

CHART OF ACCOUNTS

Yard Spray Inc.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
350	Stock Dividends Distributable
351	Cash Dividends
352	Stock Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense

Answer 1

a.

b.

Balance in Paid in capital from sale of treasury stock on Dec. 31 = $68,000+$4,100 = $72,100

c.

Balance in treasury stock on Dec. 31 = $364,800-258,400-77,900 = $28,500

d.

Treasury will be deducted from total paid in capital and retained earnings to show stockholders' equity.