Mystic Lake Inc. bottles and distributes spring water. On July 9of the current year, Mystic Lake reacquired 39,500 shares of itscommon stock
The stock outstanding when a corporation has issued only oneclass of stock.
at $42 per share. On September 22, Mystic Lake Inc. sold 30,100of the reacquired shares at $51 per share. The remaining 9,400shares were sold at $41 per share on November 23.
Required:
A. Journalize the transactions of July 9, September 22, andNovember 23. Refer to the Chart of Accounts for exact wording ofaccount titles. B. What is the balance in Paid-In CapitalCapital contributed to a corporation by the stockholders andothers.
from Sale of Treasury Stock on December 31 of the currentyear? C. For what reasons might Mystic Lake have purchased the treasurystock? CHART OF ACCOUNTS Mystic Lake Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment
LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable
EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income Summary A. Journalize the transactions of July 9, September 22, andNovember 23. Refer to the Chart of Accounts for exact wording ofaccount titles.
PAGE 10
JOURNAL
DATE DESCRIPTION POST. REF. DEBIT CREDIT 1
2
3
4
5
6
7
8
B. What is the balance in Paid-In Capital
Capital contributed to a corporation by the stockholders andothers.
from Sale of Treasury Stock on December 31 of the currentyear?selector 1
Debit
Credit
Points:
Feedback
Check My Work
Explanation
C. For what reasons might Mystic Lake have purchased thetreasury stock? Check all that apply.
For reissuance to employees as a bonus according to stockpurchase agreements.
The company wishes to receive more of its own dividends.
To provide shares for resale to employees.
The company wishes to increase the par value of its stock.
To support the market price of the stock.
Mystic Lake Inc. bottles and distributes spring water. On July 9of the current year, Mystic Lake reacquired 39,500 shares of itscommon stock
The stock outstanding when a corporation has issued only oneclass of stock.
at $42 per share. On September 22, Mystic Lake Inc. sold 30,100of the reacquired shares at $51 per share. The remaining 9,400shares were sold at $41 per share on November 23.
Required:
A. | Journalize the transactions of July 9, September 22, andNovember 23. Refer to the Chart of Accounts for exact wording ofaccount titles. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | What is the balance in Paid-In Capital Capital contributed to a corporation by the stockholders andothers. from Sale of Treasury Stock on December 31 of the currentyear? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | For what reasons might Mystic Lake have purchased the treasurystock? | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|