20.00 points Exercise 18-14 Treasury stock; weighted-average and FIFO cost [LO18

Question

20.00 points Exercise 18-14 Treasury stock; weighted-average and FIFO cost [LO18-5) At December 31, 2015, the balance sheet of Meca International included the following shareholders' equity accounts Shareholders' Equity o 70 iion shares at S1 par $ (5 in millions) S 70 500 610 capi cess of par Required Assuming that Meca international views its share buybacks as treasury stock record the appropriate journal entry for each of the following transactions: (lf no entry is required for a transaction event, select No journal entry required" in the first account field. Enter wour answers in millions (i.e., 10,000,000 should be entered as 10).) 1. On February 12. 2016, Meca reacquired 1 million common shares at $20 per share 2. On June 9, 2017 Meca reacquired 2 milion common shares at 517 per share 3. On May 25. 2018, Meca sold 2 miltion treasury shares at $23 per share-determine cost as the ieighted-average cost of treasury shares 4. For the previous transaction, assume Meca determines the cost of treasury shares by the FiFO method Journal entry worksheet Record the reacquísition of A million common shares at 520 per share

Explanation / Answer

Ans 18-14 Date Accounts Title Dr Cr 1 Treasury stock $20 Cash $20 2 Treasury stock $34 Cash $34 3 Cash (23*2) 46 Paid in capital excess of Treasury stock 10 Treasury stock 36 (20+34)/3*2 4 Cash (23*2) 46 Paid in capital excess of Treasury stock 9 Treasury stock (20+(17*1)) 37

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