Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 15: Question 9BE (page 811)

Arantxa Corporation has outstanding 20,000 shares of \(5 par value common stock. On August 1, 2017, Arantxa reacquired 200 shares at \)80 per share. On November 1, Arantxa reissued the 200 shares at $70 per share. Arantxa had no previous treasury stock transactions. Prepare Arantxa’s journal entries to record these transactions using the cost method.

Short Answer

Expert verified

In the books of Arantxa, Corporation treasury stock should be credited with $16,000.

Step by step solution

01

Meaning of Outstanding Shares

The termoutstanding shares refers to the actualnumber of sharesof a company outstanding in the market and holding by its shareholders at a given point in time.

02

Preparing Sprinkle’s Journal Entries using Cost Method

Date

Particular

Folio

Debit USD

$

Credit USD

$

01-08-2017

Treasury Stock (200$80) A/c Dr.

16,000

To Cash A/c Cr.

16,000

(being treasury stock issued)

01-11-2017

Cash (200$70) A/c Dr.

14,000

Retained Earnings A/c. Dr.

2,000

To Treasury Stock A/c Cr.

16,000

(being treasury stock transferred)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

(Computation of Retained Earnings) The following information has been taken from the ledger accounts of Isaac Stern Corporation.

Total income since incorporation $317,000

Cash dividends paid 60,000

Total value of stock dividends distributed 30,000

Gains on treasury stock transactions 18,000

Unamortized discount on bonds payable 32,000

Instructions

Determine the current balance of retained earnings.

This comment appeared in the annual report of MacCloud Inc.: “The Company could pay cash or property dividends on the Class A common stock without paying cash or property dividends on the Class B common stock. But if the Company pays any cash or property dividends on the Class B common stock, it would be required to pay at least the same dividend on the Class A common stock.” How is a property dividend accounted for in the financial records?

Distinguish between common and preferred stock

Kaymer Corporation issued 300 shares of \(10 par value ordinary shares for \)4,500. Prepare Kaymer’s journal entry.

Distinguish among: cash dividends, property dividends, liquidating dividends, and stock dividends.
See all solutions

Recommended explanations on Business Studies Textbooks

Organizational Communication

Read Explanation

Organizational Behavior

Read Explanation

Business Development

Read Explanation

Managerial Economics

Read Explanation

Business Case Studies

Read Explanation

Strategic Analysis

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free