Stock Issuance and Treasury Stock Century, Inc. recorded certain capital stock t

Question

Stock Issuance and Treasury Stock Century, Inc. recorded certain capital stock transactions shown in the following journal entries: (1) issued common stock for $20 cash per share. (2) purchased treasury shares at $25 per share, and (3) sold some of the treasury shares: 1 Cash 500,000 Common stock 75,000 Paid-in capital in excess of par value 25,000 2 Treasury stock 100,000 Cash 100,000 3 Cash 81,000 Treasury stock Paid-in capital from treasury stock 75,000 6,000 a. How many shares were originally issued? shares b. What was the par value of the shares issued? 5 0 per share shares of treasury stock were acquired

Explanation / Answer

Issued common stock for $20 cash per share.

a. Shares issued = Cash received / 20 cash per share

= 500,000 / 20

= 25,000 shares

b. Par value of shares issued = Common stock / Number of shares issued

= 75,000 / 25,000

= 3 per share

Purchased treasury sharers at $25 per share.

c. Shares of treasury stock acquired = Cash paid / 25 per share

= 100,000 / 25

= 4,000 shares

d. Shares of treasury stock sold = Treasury stock / $ 25 per share

= 75,000 / 25

= 3,000 shares

e. Price treasury stock were sold at = Cash received / Shares of treasury stock sold

= 81,000 / 3,000

= 27 per share

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