Water Inc. reacquired 26,550 shares of its common stock

The stock outstanding when a corporation has issued only one class of stock.

at $67 per share. On September 6, Biscayne Bay Water Inc. sold 12,750 of the reacquired shares at $73 per share. The remaining 13,800 shares were sold at $64 per share on November 30.

Required:

A.

Journalize the transactions of May 14, September 6, and November 30. Refer to the Chart of Accounts for exact wording of account titles.

B.

What is the balance in Paid-In Capital

Capital contributed to a corporation by the stockholders and others.

from Sale of Treasury Stock on December 31 of the current year?

C.

Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?

D.

For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock?

CHART OF ACCOUNTS

Biscayne Bay Water 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
236	Stock Dividends Distributable
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

351

Cash Dividends

352

Stock Dividends

390

Income Summary

A. Journalize the transactions of May 14, September 6, and November 30. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7
8

Final Questions

B. What is the balance in Paid-In Capital

Capital contributed to a corporation by the stockholders and others.

from Sale of Treasury Stock on December 31 of the current year?selector 1

Credit

Debit

C. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet?

selector 1

Liabilities section

Stockholder\'s Equity section

Assets section

Not reported on the balance sheet

D. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock? Check all that apply.

To support the market price of the stock.

The company wishes to increase the par value of its stock.

For reissuance to employees as a bonus according to stock purchase agreements.

The company wishes to receive more of its own dividends.

To provide shares for resale to employees.

  

Answer rating: 100% (QA)

A Journal entries may 14 Treasury stock 1778850 Cash 265... View the full answer