Refer to the following information for Petra Sales Company: Common stock, $1.00

Q: Refer to the following information for Petra Sales Company: Common stock, $1.00

solution : Option B is correct. Account title Debit Credit cash (10000 shares*14) 140000 Treasury stock (10000 shares*12) 120000 Paid in capital (10000 shares*2) 20000 Account title Debit Credit cash (10000 shares*14) 140000 Treasury stock (10000 shares*12) 120000 Paid in capital (10000 shares*2) 20000

ID: 2460366 • Letter: R

Question

Refer to the following information for Petra Sales Company: Common stock, $1.00 par, 200,000 issued, 180,000 outstanding Paid-in capital in excess of par: $1,600,000 Retained earnings: $2,440,000 Treasury stock: 20,000 shares purchased at $12 per share If Petra Sales sells 10,000 shares of treasury stock at $14 per share, what journal entry will be made? Debit Cash $140,000 and credit Treasury slock $140,000. Debit Cash $140,000, credit Treasury stock $120,000 and credit Paid-in capital $20,000. Debit Treasury stock $140,000 and credit Cash $140,000. Debit Cash $140,000, credit Treasury stock $120,000 and credit Gain on sale of treasury stock $20,000.

Explanation / Answer

solution :

Option B is correct.

Account title

Debit

Credit

cash (10000 shares*14)

140000

Treasury stock (10000 shares*12)

120000

Paid in capital (10000 shares*2)

20000