Methods of accounting for treasury stock

Assignment Help Accounting Basics

Reference no: EM1310518

1. In 2012, Mordica Co. issued 300,000 of its 500,000 authorized shares of $10 par value common stock at $35 per share. In January, 2013, Mordica repurchased 20,000 shares at $30 per share. Assume these are the only stock transactions the company has ever had.

Required:

(a) What are the two methods of accounting for treasury stock?

(b) Prepare the journal entry to record the purchase of treasury stock by the cost method.

(c) 7,000 shares of treasury stock are reissued at $33 per share. Prepare the journal entry to record the reissuance by the cost method.

Reference no: EM1310518

Questions Cloud

Hypothetical research study : Write a research report based on hypothetical research study. Conducting research and writing report is common practice for numerous students and practitioners in any of the behavioral sciences fields.

Cost of equity capital using arithmetic average growth rate : If stock presently sells for= $50, what is your best estimate of company’s cost of equity capital by using arithmetic average growth rate in dividends?

Show the influence on the optimal dividend policy : Myron Gordon and John Lintner believe that the required return on equity increases as the dividend payout ratio is decreased. Their argument is based on the assumption

Creating different volume such as the striped, mirrored : What should you do in order to create a different volume kind such as the striped, mirrored, or Raid 5 volumes? Why utilize the Windows command line when we live within the GUI world?

Methods of accounting for treasury stock : What are the two methods of accounting for treasury stock? Prepare the journal entry to record the purchase of treasury stock by the cost method.

Financial writer andrew tobias described an incident : The financial writer Andrew Tobias described an incident that occurred when he was a student at the Harvard Business School

What is the coupon rate : What is The coupon rate and it is true that the asset of an operating lease will show up on the balance sheet

The variable cost for every additional student : The college has annual fixed costs of $10 million, also the variable cost for every additional student is $5,000.

Marketing research objective questions : Marketing research objective questions.

User Account

All Pages