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Tulip Corporation reacquired 2,000 shares of its common stock for $12 per share on December 31. It recorded a journal entry debiting Treasury Stock for $24,000 and crediting Cash for $24,000. Later, Tulip reissued the treasury shares for $17 per share. It recorded an entry debiting Cash for the amount received and crediting Treasury Stock for the original $24,000 cost. Any difference between the amounts was recorded as additional paid-in capital.

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127 views1 page

12 2 6

Tulip Corporation reacquired 2,000 shares of its common stock for $12 per share on December 31. It recorded a journal entry debiting Treasury Stock for $24,000 and crediting Cash for $24,000. Later, Tulip reissued the treasury shares for $17 per share. It recorded an entry debiting Cash for the amount received and crediting Treasury Stock for the original $24,000 cost. Any difference between the amounts was recorded as additional paid-in capital.

Uploaded by

Ashley
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1/2/2020 CengageNOWv2 | Online teaching and learning resource from Cengage Learning

Treasury Stock

Instructions X

Chart of Accounts X
Tulip Corporation uses the cost method to account for treasury stock transactions on December 31.
General Journal Shaded cells have feedback. X

Next Level Shaded cells have feedback. X


CHART OF ACCOUNTS
Required:

What What journal


journal entry entry
wouldwould Tulip make
Tulip make to record Tulip
to record
the Corporation
the reacquisition
reacquisition of 2,000
of 2,000 shares
shares of its common
of its common stock stock
at $12atper
$12share
per share? After the
on December treasury stock
31?
transaction, General Ledger
At what price Tulip madewere
per share the following journal
the treasury entry
shares when it reissued the treasury shares:
reissued?

HowThe
does gradingshares
treasury work? were reissued at
ASSETS ✔ per share.
$17.00 REVENUE
111 Cash 411 Sales Revenue PAGE 1
PAGE 1
Points: 1/1
121 Accounts Receivable GENERAL JOURNAL Score: 25/25
GENERAL JOURNAL
141 Inventory EXPENSES
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT
Feedback
152 Prepaid
DATE ✔ Insurance ACCOUNT TITLE 500 Cost of
✔ Goods
POST. Sold
REF. DEBIT ✔ CREDIT
1 Dec. 31 Treasury Stock   24,000.00
1 Dec.
18131
Check Cash
Equipment
My Work  
511 Insurance Expense 34,000.00  
✔ ✔
2 Cash Depreciation
189 Accumulated
 
512 Utilities Expense 24,000.00
2 Treasury Stock 24 000 00
Under the cost method, when the corporation reissues the treasury shares, it
521 Salaries Expense
increases cash for the amount received and reduces (credits) the Treasury Stock

account for the cost of the shares reissued. Any difference between the cash

https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false 1/1

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