Professional Documents
Culture Documents
2011-03-06 234928 Jacobsen
2011-03-06 234928 Jacobsen
Common Stock ($5 par) $500,000, Paid-in Capital in excess of par value $200,000, and
Retained Earnings $100,000. In 2010, the company had the following treasury stock
transactions.
Mar 1 Purchased 5,000 share at $9 per share
June 1 Sold 1,000 shares at $12 per share
Sept 1 Sold 2,000 shares at $10 per share
Dec 1 Sold 1,000 shares at $6 per share
Jacobsen Corporation uses the cost method of accounting for treasury stock. In 2010, the
company reported net income of $30,000
(a) Journalize the treasury stock transactions, and prepare the closing entry at December
31, 2010, for the net income
(b) Open accounts for (1) Paid in Capital from Treasury Stock, (2) Treasury Stock, and
(3) Retained Earnings. Post to these accounts using J10 as the posting reference.
(c) Prepare the stockholders equity section for Jacobsen Corporation at December 31,
2010.
Optional Information:
Level/Year: Year 2
Subject: Accounting
Already Tried:
Mar 1 Treasury Stock 45,000 Cash 45,000 (to record purchase of 5,000 Shares of treasury
stock at $9 per share) June 1 Cash 12,000
(a)
Mar. 1
45,000
12,000
45,000
June 1
9,000
Paid-in Capital from Treasury
Stock (1,000 X $3).............................................
3,000
Sept. 1
18,000
Paid-in Capital from Treasury
20,000
6,000
Income Summary...........................................................
Retained Earnings................................................
30,000
3,000
9,000
31
30,000
(b)
Paid-in Capital from Treasury Stock
Date
June
Sept.
Dec.
Explanation
1
1
1
Ref.
Debit
J10
J10
J10
3,000
Ref.
Debit
J10
J10
J10
J10
45,000
Explanation
Ref.
Debit
Balance
J10
Credit
Balance
3,000
2,000
3,000
5,000
2,000
Credit
Balance
9,000
18,000
9,000
45,000
36,000
18,000
9,000
Credit
Balance
30,000
100,000
130,000
Treasury Stock
Date
Mar.
June
Sept.
Dec.
Explanation
1
1
1
1
Retained Earnings
Date
Jan.
Dec.
1
31
(c)
JACOBSEN CORPORATION
Stockholders equity
Paid-in capital
Capital stock
Common stock, $5 par,
100,000 shares issued and
99,000 outstanding...................................
$500,000
Additional paid-in capital
In excess of par value..................................
From treasury stock....................................
Total additional paid-in
capital.............................................
202,000
Total paid-in capital..........................
702,000
Retained earnings............................................................
130,000
Total paid-in capital and
retained earnings...........................
832,000
Less: Treasury stock (1,000 common
shares, at cost)...................................................
(9,000)
Total stockholders
equity..............................................
$823,000
$200,000
2,000