Question

*Problem 13-02A a-c Pronghorn Corporation had the following stockholders' equity accounts on January 1, 2020: Common Stock (55 par) $550,000, Paid-in Capital in Excess of Par-Common Stock $180,000, and Retained Earnings $100,000. In 2020, the company had the following treasury stock trensactions, Mar. 1 Purchased 7,000 shares at $8 per share une Sold 1,500 shares at $13 per share. Sept.1 Sold 1,500 shares at $10 per share Dec. 1 Sold 1,000 shares at $7 per share. Pronghorn Corporetion uses the cost method of accounting for treasury stock. In 2020, the company reported net income of $26,000 Journalize the treasury stock transactions, and prepare the dosing entry at December 31, 2020, for net income. (Record journal entries in the order presented in the probiem. Credit account tities are automatically indented when amount is entered. Do not indent manually.) Date Account Tities and Explanation Debit Credit Dec. 1 Open accounts for Paid-in Capital from Treasury Stock, Treasury Stock, and Retained Earnings. (Post entries in the order of journal entries presented in the previous part.)

Answer 1

Mar-01	Treasury stock (7000*$8)	56000
	Cash		56000
Jun-01	Cash (1500*$13)	19500
	Paid in capital from Treasury stock (1500*$5)		7500
	Treasury stock (1500*$8)		12000
Sep-01	Cash (1500*$10)	15000
	Paid in capital from Treasury stock (1500*$2)		3000
	Treasury stock (1500*$8)		12000
Dec-01	Cash (1000*$7)	7000
	Paid in capital from Treasury stock (1000*$1)	1000
	Treasury stock (1000*$8)		8000
Dec-31	Income summary	26000
	Retained earnings		26000

PAID IN CAPITAL FROM TREASURY STOCK
12/01/2020-Treasury stock	1000	7500	06/01/2020-Cash
		3000	09/01/2020-Cash
	1000	10500
		9500
TREASURY STOCK
1/1/2020-Cash	56000	12000	06/01/2020-Cash
		12000	09/01/2020-Cash
		8000	12/01/2020-Cash
	56000	32000
12/31/2020 End Bal	24000
RETAINED EARNINGS
		100000	01-01-2020-Beg Bal
		26000	12/31/2020-Income Summary
		126000	12/31/2020 End Bal

BALANCE SHEET (PARTIAL)
Total liabilities & Stockholders' equity:
Stockholders' Equity:
Paid in capital:
Common stock, $ 5 par, 110,000 issued		550000
Additional paid in capital:
Common stock	180000
Paid in capital from treasury stock	9500
Total additional paid in capital		189500
Total paid in capital		739500
Retained earnings		126000
Total paid in capital and retained earnings		865500
Less:
Treasury stock		24000
Total stockholders' equity		841500