Lawn Spray Inc develops and produces spraying equipment for

Lawn Spray Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On January 31 of the current year, Lawn Spray Inc. reacquired 19,900 shares of its common stock at $19 per share. On June 14, 13,500 of the reacquired shares were sold at $24 per share, and on November 23, 5,100 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 exact wording of account titles. B. What is the balance in Paid-In Capital from Sale of Treasury Stock on Decmber 31 of the current year? C. 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?

Solution

Date General Journal Debit Credit 31-Jan Treasury stock 378100 Cash 378100 19900*19 14-Jun Cash 13500*24 324000 Treasury Stock 13500*19 256500 Paid-In Capital from Sale of Treasury Stock 13500*(24-19) 67500 23-Nov Cash 5100*20 102000 Treasury Stock 5100*19 96900 Paid-In Capital from Sale of Treasury Stock 5100*(20-19) 5100 2 Paid-In Capital from Sale of Treasury Stock on December 31 72600 (5100+67500) 3 balance in Treasury Stock on December 31 24700 (378100-256500-96900)