Question

On October 10, the stockholders’ equity of Sherman Systems appears as follows. Common stock–$10 par value, 95,000 shares authorized, issued, and outstanding $ 950,000 Paid-in capital in excess of par value, common stock 331,000 Retained earnings 1,048,000 Total stockholders’ equity $ 2,329,000 1. Prepare journal entries to record the following transactions for Sherman Systems. Purchased 7,300 shares of its own common stock at $48 per share on October 11. Sold 1,575 treasury shares on November 1 for $54 cash per share. Sold all remaining treasury shares on November 25 for $43 cash per share.

Answer 1

Date Description DR CR

$ $

Oct 11 Treasury Stock 350,400

Cash 350,400

Being the purchse of teasury stock

Nov 1 Cash 85,050

Paid in Capital from Treasury stock 9,450

Treasury stock 75,600

Being the cash realized on the sales of Treasury

stock above cost

Nov 25 Cash 246,175

Paid in capital from Treasury stock 9,450

Retained earnings 19,175

Treasury Stock 274,800

Being the sales of Treasury stock below the cost

Step-by-step explanation: