Question

Assume that during 2011, Tompkins Financial Corporation repurchased 1,500 of its own shares at an average price of \$38.67 per share. Par value was \$.10 per share. Assume the shares were originally issued for \$28.
1. Prepare the journal entry for the 2011 purchase of shares assuming that they were treated as treasury shares.
2. Assume instead, that Tompkins did not add the repurchased shares to treasury stock. Instead, it canceled the shares and returned them to unissued status. This is accounted for with a debit to Capital Stock at Par Value, a debit to Additional Paid-in Capital for the surplus created by the initial issuance, and a debit to Retained Earnings for the remainder. Give the actual entry Tompkins made.

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