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Nicole Johnson

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Johnston, Inc., engaged in the following transactions involving treasury stock: Feb. 10 - Purchased for cash 17,000 shares of treasury stock at a price of $25 per share. June 4 - Reissued 6,000 shares of treasury stock at a price of $33 per share. Dec. 22 - Reissued 4,000 shares of treasury stock at a price of $22 per share. a. Prepare general journal entries to record these transactions. b. Compute the amount of retained earnings that should be restricted because of the treasury stock still owned at December 31. c. Does a restriction on retained earnings affect the dollar amount of retained earnings reported in the balance sheet?

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  • JKRB
    Lv 7
    7 years ago
    Favorite Answer

    a. Prepare general journal entries to record these transactions.

    Feb. 10 - Purchased for cash 17,000 shares of treasury stock at a price of $25 per share.

    Dr Treasury Stock 425,000

    Cr Cash 425,000

    June 4 - Reissued 6,000 shares of treasury stock at a price of $33 per share.

    6,000 x 33 = $198,000 total cash received

    6,000 x 25 = $150,000 cost

    Dr Cash 198,000

    Cr Treasury Stock 150,000

    Cr Paid-in Capital from Sale of Treasury Stock 48,000

    Dec. 22 - Reissued 4,000 shares of treasury stock at a price of $22 per share.

    4,000 x 22 = $88,000 cash received

    4,000 x 25 = $100,000 cost

    Dr Cash 88,000

    Dr Paid-in Capital from Sale of Treasury Stock 12,000

    Cr Treasury Stock 100,000

    b. Compute the amount of retained earnings that should be restricted because of the treasury stock still owned at December 31.

    425,000 - 150,000 - 48,000 + 12,000 - 100,000 = $139,000

    c. Does a restriction on retained earnings affect the dollar amount of retained earnings reported in the balance sheet?

    No, restrictions on retained earnings are normally reported in notes to the financial statements.

    Source(s): Accounting Fan
  • Pamela
    Lv 4
    4 years ago

    I've thought of 4 possible options on transfering your money. (there may be more) The drop party method is a risk. I would advise you to get a whole lot of junk that is worth a lot on your main account and when your trading the money from pure...just trade the junk and money...but thinking about it...there are some alternative downs to it bevcause you'd be buying junk thats worth as much as the money unless you just pick junk up from the ground. If you want to try the drop party method, place the money you want to transfer in the party box by small portions. (ex:/ 50k-100k) To decrease the chance of another player getting your money you can switch servers. How?...Go to Runescape main page, on the top left corner there are 3 small flags. Choose german or french and select a world with a minimum amount of people. -You might have difficulties in server because the language is completely different.- If both accounts were members raising quest points on both accounts would help a lot. You could also try the 26k trick. To do this you must be in a PVP world. find a place where there are least people (like Draynor). To do the 26k trick both accounts must be skulled. Make your pure account store everything in bank and only have 26k in inventory. Have your main wear your best gear, weapons, armour etc while killing your pure because the more wealth you put on risk the better the drop may be. when your main kills your pure that has 26k it will drop items that are worth more than the 26k most of the times. you don't get 100% good drops all the time and sometimes the trick may drop the full 26k with other items. So this method isn't too secure but an option. (place your common sense when your in pvp & listen to how to do 26k but don't be in the middle of no where in PVP because someone may kill you) It's always good to do trick near a bank. Other then that 5k per 15min is probably your only way because Jagex doesn't want you to do what your doing, even though both of the accounts are yours, if they made this kind of trading possible then hackers can instantly get money from their victims accounts to theirs.

  • Anonymous
    5 years ago

    Part B is wrong

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