Ex. 290
On January 1, 2014, the equity section of Lopez Corporation shows: Share capital–ordinary ($5 par value) $1,500,000; share premium–ordinary $1,000,000; and retained earnings $1,200,000. During the year, the following treasury share transactions occurred.
Mar.1 Purchased 30,000 shares for cash at $14 per share.
July1 Sold 6,000 treasury shares for cash at $17 per share.
Sept.1 Sold 5,000 treasury shares for cash at $13 per share.
Instructions
(a)Journalize the treasury share transactions.
(b)Restate the entry for September 1, assuming the treasury shares were sold at $10 per share.
Ex. 291
On May 1, Hite Corporation purchased 1,000 of its $10 par value ordinary shares at a cash price of $13/share. On July 15, 600 treasury shares were sold for cash at $15/share.
Instructions
Journalize the two transactions.
Ex. 292
Yunger Corporation has the following equity accounts on January 1, 2014:
Share Capital–Ordinary, $10 par value .........................$1,500,000
Share Premium–Ordinary..................................200,000
Retained Earnings........................................ 500,000
Total Equity............................................$2,200,000
The company uses the cost method to account for treasury share transactions. During 2014, the following treasury share transactions occurred:
April1Purchased 9,000 shares at $16 per share.
August1Sold 3,000 shares at $18 per share.
October1Sold 3,000 shares at $15 per share.
Instructions
(a)Journalize the treasury share transactions for 2014.
(b)Prepare the Equity section of the statement of financial position for Yunger Corporation at December 31, 2014. Assume net income was $110,000 for 2014.