The stockholders equity of Thomas Company as of December 31, 2010, was as follows: Common stock ,

Question:

The stockholders’ equity of Thomas Company as of December 31, 2010, was as follows:
, $1 par, authorized 275,000 shares;
240,000 shares issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . $ 240,000
Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,840,000
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000

On June 1, 2011, Thomas reacquired 15,000 shares of its common stock at $16. The following transactions occurred in 2011 with regard to these shares.
July 1 Sold 5,000 shares at $20.
Aug. 1 Sold 7,000 shares at $14.
Sept. 1 Retired 1,000 shares.
1. Using the cost method to account for treasury stock:
(a) Prepare the journal entries to record all treasury stock transactions in 2011.
(b) Prepare the Stockholders’ Equity section of the at December 31, 2011, assuming Retained Earnings of $1,005,000 (before the effects of treasury stock transactions).
2. Using the method to account for treasury stock:
(a) Prepare the journal entries to record all treasury stock transactions in 2011.
(b) Prepare the Stockholders’ Equity section of the at December 31, 2011, assuming Retained Earnings of $1,005,000 (before the effects of treasury stock transactions).

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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...