1. When treasury stock is purchased for $42 per share and subsequently sold for
ID: 2493562 • Letter: 1
Question
1. When treasury stock is purchased for $42 per share and subsequently sold for $47 per share, treasury stock is credited for $____ per share and Paid-in Capital from the Sale of Treasury Stock is credited for $____ per share when the sale is recorded. 2. When treasury stock is purchased for $42 per share and subsequently sold for $40 per share, treasury stock is credited for $____ per share and Paid-in Capital from the Sale of Treasury Stock is debited for $_____ per share when the sale is recorded. 3. When treasury stock is purchased for $38 per share and subsequently sold for $47 per share, treasury stock is credited for $_____ per share and Paid-in Capital from the Sale of Treasury Stock is credited for $____ per share when the sale is recorded. 4. When treasury stock is purchased for $38 per share and subsequently sold for $40 per share, treasury stock is credited for $____ per share and Paid-in Capital from the Sale of Treasury Stock is credited for $_____ per share when the sale is recorded.
Explanation / Answer
when the treasury stock is purchased it is debited and cash is credit 1. 42 debited , and when sold it is credited and balance ( profit / loss ) is transfered to revenue a/c or profit and loss a/c as the case may be ...
1. debited 42...., credited 47, profit 5
2.debited 42..., credited 40, loss 2
3.debited 38..., credited 47 , profit 9
4.debited 38.., credited 40 , profit 2
particulars debit credit 1 treasury stock ac dr 42 to cash/bank 42 (being purchase of treasury stock) cash dr 47 to treasury stock 47 (being treasury stock sold ) treasury stock ac dr 5 to profit and loss a/c 5 (being profit on sale of treasury stock transferred to P&La/c ) 2 treasury stock ac dr 42 to cash/bank 42 (being purchase of treasury stock) cash dr 40 profit & loss dr 2 to treasury stock 42 ( being treasury stock sold at loss of $ 2 ) 3 treasury stock ac dr 38 to cash/bank 38 (being purchase of treasury stock) cash dr 47 to treasury stock 47 (being treasury stock sold at 47 treasury stock ac dr 9 to profit and loss a/c 9 (being profit on sale of treasury stock transferred to P&La/c ) 4 treasury stock a/c dr 38 to cash/bank a/c 38 (being purchase of treasury stock) cash A/c dr 40 to treasury stock 40 treasury stock ac dr 2 to profit and loss a/c 2 (being profit on sale of treasury stock transferred to P&La/c )Related Questions
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