Answer:
Dr Treasury stock 3,000
Cr Cash 3,000
Total Stockholders’ equity $52,000
50 shares
Step-by-step explanation:
Preparation of the Journal entry for the purchase of the treasury stock.
Dr Treasury stock 3,000
(200 shares ×$15 )
Cr Cash 3,000
Preparation of the stockholders’ equity section of the balance sheet at December 31, 2018
Stockholders’ equity
Paid in capital
Common stock $1,250
($5×250 shares)
Paid in capital in excess of part $3,750
Total paid in capital $5,000
(3,750+1,250)
Retained earnings $50,000
Treasury stock ($3,000)
Total Stockholders’ equity $52,000
Calculation for shares of common stock that are outstanding after the purchase of treasury stocks
Outstanding common stock=$250 shares-$200 shares
Outstanding common stock=50 shares
Therefore 50 shares of common stock are outstanding after the purchase of treasury stocks