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Ayayai Corporation had the following stockholders’ equity accounts on January 1, 2020: Common Stock ($5 par)...

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Accounting

Ayayai Corporation had the following stockholders’ equityaccounts on January 1, 2020: Common Stock ($5 par) $500,000,Paid-in Capital in Excess of Par—Common Stock $200,000, andRetained Earnings $120,000. In 2020, the company had the followingtreasury stock transactions.

Mar.1Purchased 5,500 shares at $9 per share.
June1Sold 1,000 shares at $13 per share.
Sept.1Sold 1,000 shares at $11 per share.
Dec.1Sold 1,500 shares at $7 per share.


Ayayai Corporation uses the cost method of accounting for treasurystock. In 2020, the company reported net income of $30,000.

Prepare the stockholders’ equity section for Ayayai Corporationat December 31, 2020. (Enter the account name only anddo not provide the descriptive information provided in thequestion.)

Answer & Explanation Solved by verified expert
3.6 Ratings (643 Votes)

Date

General Journal

Debit

Credit

Mar-01

Treasury stock

$ 49,500.00

      Cash

$    49,500.00

(Purchase of treasury stock)

Jun-01

Cash

$ 13,000.00

Paid in capital - Treasury stock

$      4,000.00

Treasury stock

$      9,000.00

(Sold treasury stock)

Sep-01

Cash

$ 11,000.00

Paid in capital - Treasury stock

$      2,000.00

Treasury stock

$      9,000.00

(Sold treasury stock)

Dec-01

Cash

$ 10,500.00

Paid in capital - Treasury stock

$    3,000.00

Treasury stock

$    13,500.00

(Sold treasury stock)

Working

Date

General Journal

Debit

Credit

Mar-01

Treasury stock

=5500*9

      Cash

=5500*9

(Purchase of treasury stock)

Jun-01

Cash

=1000*13

Paid in capital - Treasury stock

=13000-9000

Treasury stock

=1000*9

(Sold treasury stock)

Sep-01

Cash

=1000*11

Paid in capital - Treasury stock

=11000-9000

Treasury stock

=1000*9

(Sold treasury stock)

Dec-01

Cash

=1500*7

Paid in capital - Treasury stock

=1500*2

Treasury stock

=1500*9

(Sold treasury stock)

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