Fechter Corporation had the following stockholders’ equity accounts on January 1

Question

Fechter Corporation had the following stockholders’ equity accounts on January 1, 2015: Common Stock ($4 par) $402,040, Paid-in Capital in Excess of Par—Common Stock $223,060, and Retained Earnings $106,150. In 2015, the company had the following treasury stock transactions.

Fechter Corporation uses the cost method of accounting for treasury stock. In 2015, the company reported net income of $33,720.

Mar. 1 Purchased 5,530 shares at $8 per share. June 1 Sold 1,050 shares at $12 per share. Sept. 1 Sold 1,550 shares at $10 per share. Dec. 1 Sold 1,300 shares at $7 per share. ournalize the treasury stock transactions, and prepare the closing entry at December 31, 2015, for net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 1| June 1 Sept. 1 Dec. 1 Dec. 31

Explanation / Answer

(a) Mar. 1 Treasury Stock (5,530 X $8) 44,240

Cash 44,240

June 1 Cash (1,050 X $12) 12,600

Treasury Stock (1,050 X $8) 9,450

Paid-in Capital from Treasury

Stock (1,050 X $4) 3,150

Sept. 1 Cash (1,550 X $10) 15,500

Treasury Stock ( 1,550 X $8) 12,400

Paid-in Capital from Treasury

Stock ( 1,550 X $2) 3,100

Dec. 1 Cash (1,300 X $7) 9,100

Paid-in Capital from Treasury Stock

(1,300 X $1) 1,300

Treasury Stock (1,300 X $8) 10,400

31 Income Summary 33,720

Retained Earnings 33,720

(b)

Paid-in Capital from Treasury Stock

Date

Explanation

Ref.

Debit

Credit

Balance

June 1

Sept. 1

Dec. 1

J10

J10

J10

1,300

3,150

3,100

3,000

6,250

4,950

Treasury Stock

Date

Explanation

Ref.

Debit

Credit

Balance

Mar. 1

June 1

Sept. 1

Dec. 1

J10

J10

J10

J10

44,240

9,450

12,400

10,400

44,240

34,790

22,390

11,990

Retained Earnings

Date

Explanation

Ref.

Debit

Credit

Balance

Jan. 1

Dec. 31

Balance

J10

33,720

106,150

139,870

(c) JACOBSEN CORPORATION

Stockholders’ equity

Paid-in capital

Capital stock

Common stock, $4 par,

100,510 shares issued $402,040

Additional paid-in capital

In excess of par value $223,060

From treasury stock $ 4950

Total additional paid-incapital $ 228,010

Total paid-in capital 630,050

Retained earnings    139,870

Total paid-in capital andretained earnings 769,920

Less: Treasury stock   (11,990)

Total stockholders equity $757,930

Date

Explanation

Ref.

Debit

Credit

Balance

June 1

Sept. 1

Dec. 1

J10

J10

J10

1,300

3,150

3,100

3,000

6,250

4,950

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