Ellison Company\'s balance sheet shows: Common stock, $20 par $3,000,000 Paid-in
ID: 2424123 • Letter: E
Question
Ellison Company's balance sheet shows:
Common stock, $20 par $3,000,000
Paid-in capital in excess of par 1,050,000
Retained earnings 750,000
Instructions
Record the following transactions by the cost method.
(a) Bought 8,000 shares of its common stock at $29 a share.
(b) Sold 4,000 treasury shares at $30 a share.
(c) Sold 2,000 shares of treasury stock at $26 a share.
Explanation / Answer
(a) Tresury Stock...................................232000
To cash..........................................................232000
(b) Cash..............................................120000
To treasury stock............................................116000
To paid in capital from tresury stock...................4000
(c) Cash...............................................52000
paid in capital from tresury stock.........4000
Retained earnings..............................2000
To treasury Stock...........................................58000
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