J/E for cost method of treasury stock
Excel Corporation sells & services air conditioning equipment. The following selected accounts
Appear in the ledger on January 1, 2005 the beginning of the current fiscal year.
Preferred Stock, $50 par, $2 / share dividend (40,000 shares authorized, 20,000 shares issued) 2,000,000
Paid in Capital in excess of Par - preferred stock 615,000
Common Stock $25 par (750,000 shares authorized, 400,000 shares issued. 10,000,000
Paid in Capital in Excess of Par - Common Stock 1,375,000
Retained Earnings 317,500
During the year, the corporation completed a number of transactions affecting the stockholders'
Equity. They are as follows:
A) 2/1/05 Purchased 30,000 shares of treasury common stock for $1,200,000
B) 3/1/05 Sold 7,000 shares of treasury stock for $45,000
C) 4/1/05 Sold 12,000 shares of preferred stock at $110
D) 5/1/05 Issued 87,000 shares of common stock at $32, receiving cash
E) 6/1/05 Sold 13,000 shares of treasury common stock for $510,000
F) 7/1/05 Declared cash dividend to cover preferred stock and $.50 per share on common stock
G) 9/1/05 Paid the Cash Dividends
Prepare journal entries to record the above transaction using the cost method for the
Treasury stock.
I am totally lost and need help in a hurry.
