The Rolek Company was involved in the following treasury stock transactions duri

Question

The Rolek Company was involved in the following treasury stock transactions during 2010:
A. Purchased 40,000 shares of its $1 par value common stock on the market for $2.50 per share.
B. Purchased 8,000 shares of its $1 par value common stock on the market for $2.80 per share.
C. Sold 22,000 shares purchased in (a) for $65,500.
D. Sold the other 18,000 shares purchased in (a) for $36,000.
E. Sold 3,000 of the remaining shares of treasury stock for $1.60 per share.
F. Retired all the remaining shares of treasury stock. All shares originally were issued at $1.50 per share.
1. Record the treasury stock transactions in T accounts.

Explanation / Answer

Treasury stock transactions A. Date Details Debit Credit A Treasury stock $100,000      Cash 100,000 (To record purchase of shares) B Treasury stock 22,400       Cash 22,400 (To record purchase of shares) C Cash 65,500     Treasury stock 65,500 (to record sale of treasurystock) D Cash 36,000     Treasury stock 36,000 (to record sale of treasurystock) E Cash 4,800    Treasury stock 4,800 (To record sales) F Cash 7,500     Treasury stock 7,500 (To recor issue of remainiig shares) Treasury Stock T accounts: Treasury Stock Account Date Details Date Details A Cash                100,000 C Cash 65,500 B Cash                  22,400 Cash 36,000 Cash 4,800 Cash 7,500 Balance 8,600 122,400 122,400 Cash Account Treasury stock 65,500 Treasury stock $100,000 Treasury stock 36,000 Treasury stock 22,400 Treasury stock 4,800 Treasury stock 7,500 Balance 8,600 122,400 122,400 Treasury stock transactions A. Date Details Debit Credit A Treasury stock $100,000      Cash 100,000 (To record purchase of shares) B Treasury stock 22,400       Cash 22,400 (To record purchase of shares) C Cash 65,500     Treasury stock 65,500 (to record sale of treasurystock) D Cash 36,000     Treasury stock 36,000 (to record sale of treasurystock) E Cash 4,800    Treasury stock 4,800 (To record sales) F Cash 7,500     Treasury stock 7,500 (To recor issue of remainiig shares)

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