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Crystal Springs Inc. bottles and distributes spring water. On June 1 of the current year, Crystal reacquired

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Crystal Springs Inc. bottles and distributes spring water. On June 1 of the current year, Crystal reacquired 2,500 shares of its common stock at $60 per share. On July 8, Crystal sold 1,500 of the reacquired shares at $65 per share. The remaining 1,000 shares were sold at $58 per share on
November 2.
a. Journalize the transactions of June 1, July 8, and November 2.
b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
c. For what reasons might Crystal Springs have purchased the treasury stock?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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a June 1 Treasury Stock 150000 Cash 150000 July 8 Cash 97500 Treasury Stock 90000 PaidIn Capital ...View the full answer


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Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.

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