Question

On January 1, 2017, the stockholders’ equity section of Pujols Corporation shows: Common stock ($5 par value) $1,500,000; paid-in capital in excess of par $1,000,000; and retained earnings $1,200,000. During the year, the following treasury stock transactions occurred. Mar. 1 Purchased 50,000 shares for cash at $17 per share. July 1 Sold 10,000 treasury shares for cash at $18 per share. Sept. 1 Sold 8,000 treasury shares for cash at $16 per share. Instructions (a) Journalize the treasury stock transactions. (b) Restate the entry for September 1, assuming the treasury shares were sold at $14 per share.

Answer 1

START END

(1) Common Stock $ 1,500,000 $ 1,340,000

(2) Paid-in Capital in Excess of Par $ 1,000,000 $ 602,000

(3) Retained Earnings $ 1,200,000 $ 1,200,000

(T) TOTAL EQUITY $ 3,700,000 $ 3,142,000

Step-by-step explanation:

March 1 July 1 Sept 1 Sept 1 Restate

(1) -$ 250,000 $ 50,000 $ 40,000

(2) -$ 600,000 $ 130,000 $ 88,000 -$ 16,000

(T) -$ 850,000 $ 180,000 $ 128,000 -$ 16,000

START END Quantities Price

(1) $ 1.500,000 $ 1.340,000 268.000 $5,00

(2) $ 1.000,000 $ 602,000 $2,25

(3) $ 1.200,000 $ 1.200,000

(T) $ 3.700,000 $ 3.142,000 268.000