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Topic: Treasury Stock - Cost Method (

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rchxenson
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Posted: 25 May 2009 at 16:44 \| IP Logged

just FYI the only ones I am unsure of are the last 2 entries:

Selling at a loss
Sell TS - - 10 shares mkt price $3
Dr. Cash 30
Dr. APIC 10
     Cr. Treasury Stock 40

Selling at a loss
Sell TS - - 10 shares mkt price $2
Dr. Cash         &a mp;n bsp;    20
Dr. APIC         &a mp;n bsp;    10
Dr. Retained Earnings 10
     Cr. Treasury Stock       40

I am trying to figureout of they should hit RE for the full amount of the loss on the TS....can't find any good examples with losses on TStock.

rchxenson
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Posted: 25 May 2009 at 17:16 \| IP Logged

k updating the post for you to what I DO know - with an explination of how Equity would also look in the same transaction...

cpa2bsoon
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Posted: 25 May 2009 at 18:07 \| IP Logged

rchxenson wrote:

maybe an example would be best:

Original Issue - 25 shares $1 dollar par, mkt price $2
Dr. Cash     50
      Cr. Common Stock 25
      Cr. APIC        25

Purchase TS - 10 shares mkt price $4 - Cost Method
Dr. Treasury Stock 40
    Cr. Cash        40

Purchase TS - 10 shares mkt price $4 - Equity Method
Dr   RE         & ; ;nbs p;       10
Dr. APIC         ; ; ;       10
Dr. Treasury Stock 10
         CR Cash         &a mp;a mp;a mp;n bsp;   30

Correction on purchase of TS - Par Value Method

Dr Treasury Stock (10sh x $1) 10

Dr APIC(10sh x $1) &nb sp; 10

Dr RE (plug) 20

Cr Cash (10sh x $4) &nb sp; 40

I found the examples given on page 52-53( F7) of the homework reading excellent.

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jay_usa
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Posted: 25 May 2009 at 23:46 \| IP Logged

Thanks Guys !..

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rchxenson
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Posted: 26 May 2009 at 09:30 \| IP Logged

thanks, I missed that, I was rushing...didn't ever change my numbers for the example :)

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