10.00 points On October 10, the stockholders\' equity of Sherm Systems appears a

Question

10.00 points On October 10, the stockholders' equity of Sherm Systems appears as follows: Common stock-$10 par value, 84,000 shares authorized, issued, and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 840,000 276,000 960,000 $2,076,000 1. Prepare journal entries to record the following transactions for Sherm Systems. a. Purchased 6,200 shares of its own common stock at $37 per share on October 11. b. Sold 1,300 treasury shares on November 1 for $43 cash per share c. Sold all remaining treasury shares on November 25 for $32 cash per share. View transaction list Journal entry worksheet Record the purchase of 6,200 shares of its own common stock for $37 cash per share.

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Oct 11 Treasury stock (6200*37) 229400 Cash 229400 (To record treasury stock) Nov 1 Cash (1300*43) 55900 Treasury stock (1300*37) 48100 Paid in capital from sale of treasury stock 7800 (To record sale of treasury stock) Nov 25 Cash (4900*32) 156800 Paid in capital from sale of treasury stock 7800 Retained earnings 16700 Treasury stock (4900*37) 181300 (To record sale of treasury stock)

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