Star Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000. It
Question:
Star Corporation purchased from its stockholders 5,000 shares of its own previously issued stock for $250,000. It later resold 2,000 shares for $53 per share, then 2,000 more shares for $48 per share, and finally 1,000 shares for $43 per share.
In 2017, Star Corporation had the following treasury stock transactions.
Mar. 1 Purchased 5,000 shares at $8 per share.
June 1 Sold 1,000 shares at $12 per share.
Sept. 1 Sold 2,000 shares at $10 per share.
Dec. 1 Sold 1,000 shares at $7 per share.
Instructions
As you know that treasury stocks play a significant role in lowering the public ownership. Considering your understanding, journalize the treasury stock transactions and find the total amount of Paid-in Capital from Treasury Stock at December 31, 2017. What are some other circumstances under which company can go for the purchase of treasury stock? Provide your valuable opinion.
Financial and managerial accounting
ISBN: 978-1118016114
1st edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso