Exercise 8- Chapter 18- 20 Points Cal Cookie Company (CCC) has 100 milion shares

Question

Exercise 8- Chapter 18- 20 Points Cal Cookie Company (CCC) has 100 milion shares of $1 par common stock authorized. The transactions below caused changes in CCC's outstanding shares January 4, 2016: Repurchased and retired 1 million shares at s8 per share. June 25, 2016: Repurchased and retired 2 million shares at $2 per share. Prior to the transactions, CCC's shareholders' equity included the following $80,000,000 Common stock, 80 million shares at $1 par Paid-in capital-excess of par Retained earnings 160,000,000 120,000,000 Required Record entries for the above transactions.

Explanation / Answer

Journal entries :

Date accounts & explanation debit credit 2016 Jan 4 Common stock a/c (1*1) 1 Paid in capital in excess of par value (1*2) 2 Retained earnings 5 Cash a/c (1*8) 8 (To record repurchase and retired stock) 2016 june 25 Common stock (2*1) 2 Paid in capital in excess of par value (2*2) 4 Cash a/c 4 Paid in capital-share purchase 2 (To record share repurchased and retirement)

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