Underwood Company's Only Treasury Stock Transactions for the Current Year

question 34

Essay

Underwood Company's only treasury stock transactions for the current year follow: (1)2,000 shares of its common stock were purchased on June 1 for $80,000; (2)On July 1 it reissued 500 of these shares at $45 per share; (3)On August 1 it reissued an additional 500 treasury shares at $38 per share.
1)Prepare the journal entries required to record these transactions.
2)Calculate the balance in Paid-in Capital,Treasury Stock,on September 1 assuming its beginning-year balance is zero.

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Definitions:

Net Incomes

The total earnings of a company after deducting all expenses and taxes, indicating the financial performance over a period.

Non-controlling Interest

A portion of the equity (ownership) in a subsidiary not owned by the parent company, reflecting the minority shareholders' claim on assets and earnings.

Equity Method

An accounting technique used by companies to record their investments in other companies, where the investment is recorded at original cost and adjusted for the investor's share of the investee's net income or loss.

Voting Shares

Shares of a company's stock that grant the shareholder the right to vote on corporate matters and decisions at shareholder meetings.