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

question 164

Essay

A company's only treasury stock transactions for the current year follow:
(1)1,000 shares of its common stock were purchased on June 1 for $40,000; (2)On July 1 it reissued 500 of these shares at $45 per share; (3)On August 1 it reissued the 500 remaining 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:

Average Total Costs (ATC)

A rephrasing of Average Total Cost, it calculates the per-unit production cost by dividing the total cost by the total quantity of goods produced.

Manufacturing Firm

A business that uses components, parts, or raw materials to make a finished good.

Marginal Cost

The cost of producing one additional unit of a product or service, used in economics to determine the optimum production level.

Output

The quantity of goods or services produced by a firm, sector, or economy.