What is the paid-in capital from treasury stock transactions?
The account Paid-In Capital from Treasury Stock Transactions has a credit balance of $2,000. The corporation resells 450 shares of its treasury stock. These shares were acquired for $10 per share and sold for $3 per share. The entry to record the sale of treasury stock includes a debit to Retained Earnings of $3,150. False Cash 1,350 (450 x 3)
How much did Jones Corporation pay for the sale of 500 shares?
On March 1st, Jones Corporation purchased 1,000 shares of previously issued common stock, paying $2 per share. On April 1st, Jones sold 500 shares at $3 per share. What is the amount of Paid-In Capital from Treasury Stock Transactions for the sale of 500 shares? Beta Electronics issued 10,000 shares of $1 stated value common stock at $3 per share.
How much did Mar 25 sell treasury stock for?
Mar. 25 Sold 600 shares of the treasury stock for cash of $ 7 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on March 24 is $ 1,200.)
What happens to treasury stock when a company sells it?
When the company sells the treasury stock, Cash is debited for the sales price (600 shares $4 per share = $2,400) and Treasury Stock is credited for the price the company paid to acquire the stock (600 shares $3 per share = $1,800).
How do you calculate treasury stock sales?
Multiply the number of shares of treasury stock you resold by the price per share at which you resold them that is lower than the initial repurchase price. Then increase your cash account balance by that amount. For example, if you resold 250 shares for $4 per share, multiply 250 by $4, which equals $1,000.
What is the journal entry for selling treasury stock?
The company can record the sale of treasury stock with the journal entry of debiting the cash account and crediting the treasury stock account when the sale price equals its cost. Opposite to the purchase, the sale of treasury stock increases both total assets and total equity.
What is the amount of paid-in capital from treasury stock transactions for the sale of 500 shares?
Another way to calculate the Paid-In Capital from Treasury Stock Transaction would be the selling price - the purchase price, so $3 - $2 = $1 per share. We sold 500 shares, so 500 * $1 per share gain is $500 (which goes to Paid-In Capital from Treasury Stock Transaction as a credit).
How is treasury stock shown on the balance sheet?
Under the cost method of recording treasury stock, the cost of treasury stock is reported at the end of the Stockholders' Equity section of the balance sheet. Treasury stock will be a deduction from the amounts in Stockholders' Equity.
How do you account for treasury stock purchases?
1 Accounting for the purchase of treasury stock. A reporting entity should recognize treasury stock based on the amount paid to repurchase its shares. It should be recorded as a reduction of stockholders' equity (i.e., as a contra-equity account).
What is treasury stock purchase?
Treasury stock, also known as treasury shares or reacquired stock, refers to previously outstanding stock that is bought back from stockholders by the issuing company. The result is that the total number of outstanding shares on the open market decreases.
What is treasury stock example?
Example: The automobile company decides to buy back shares for $100 million. The company must record this in shareholder equity on its balance sheet. It will list $100 million as cash under credit and $100 million as treasury stock under debit.
When treasury stock is purchased treasury stock is quizlet?
The purchase of treasury stock is recorded at its cost in the treasury stock account and when treasury shares are reissued they are remove from the treasury stock account at their cost. company reports the treasury stock account as a contra account to the related common stock account that has been repurchased.
Is treasury stock a debit or credit?
debit balanceAs a contra equity account, Treasury Stock has a debit balance, rather than the normal credit balances of other equity accounts. The total cost of treasury stock reduces total equity.
How is treasury stock reported in the financial statements quizlet?
Treasury stock should be reported in the financial statements of a corporation as a deduction from total paid-in capital and retained earnings. Declared dividends are necessary in order for a corporation to pay a cash dividend.
What is the per share cost of the treasury stock purchased?
Divide the treasury stock's total cost by the number of shares to calculate the average price the company paid for its treasury stock. Continuing the example, divide $1 million by 100,000 to get a $10 average price per share of treasury stock.
What is a treasury stock quizlet?
Define Treasury Stock. A corporation's own stock that was issued then reacquired (purchased or donated), but not retired; it is held "in the treasury" until later sold, distributed, or retired.