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Question :
On January 1, 2018, its first year of business, Scotti Company issued 2,000,000 shares of $5 par value Common Stock for $18 per share. On July 5, 2018, Scotti repurchased 200,000 shares at $20 per share. On August 4, 2018, Scotti reissued 50,000 of its Treasury shares at $25 per share.
On September 15, 2018, Scotti reissued 50,000 of its Treasury shares at $23 per share. On December 29, Scotti reissued the remaining 100,000 shares for $15.50 per share. Scotti earned $420,000 of net income throughout the year and did not pay any dividends in its first year. 1. How would Scotti report the September 15th sale of the treasury shares?2. What is the balance in the Retained Earnings account on December 31, 2018?
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