4. Bargain Central Furniture, Inc., completed the following treasury stock trans

Question

4. Bargain Central Furniture, Inc., completed the following treasury stock transactions:

a. purchased 1,300 shares of the company's $1par common stock as treasury stock, paying cash or $6 per share.

b. sold 700 shares of the treasury stock for cash of $9 per share

Requirements

R1. Journalize these transactions. Explanations are not required.

R2. Show how Bargain Central will report treasury stock on its December 31, 2010 balance sheet after completing the two transactions. In reporting the treasury stock, report only on the Treasury Stock account. You may ignore all other accounts.

Explanation / Answer

Solution:

Journal Debit Credit a Treasury Stock - 1300*6          7,800 Cash          7,800 b Cash - 9 *700          6,300 Additional Paid in capital          2,100 Treasury stock - 700*6          4,200

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