Question

TB Problem 18-155 (Algo) Cal Cookie Company (CCC) has 100 million shares of $1 par common stock authorized. The transactions below caused changes in CCC's outstanding shares January 4, 2021: Repurchased and retired 2.40 million shares at $7.60 per share. June 25, 2021: Repurchased and retired 3.40 million shares at $3.40 per share. Prior to the transactions, CCC's shareholders' equity included the following: Common stock, 79.60 million shares at $1 par Paid in capital-excess of par Retained earnings $ 79,600,000 270,640,000 116,000,000 Required: Prepare the journal entries to record the repurchase and retirement of the shares. (Do not round your per share amounts. If no entry is required for a transaction/event, select "No journal entry required" in the first account fleld. Enter your answers in whole dollars.)

Answer 1

Journal Entries:

Date	General Journal	Debit	Credit
January 04, 2021	Common Stock [2,400,000 x $1]	$ 2,400,000
	Paid-in Capital - excess of par [2,400,000 x $3.4]	$ 8,160,000
	Retained Earnings [Balance amount]	$ 7,680,000
	Cash [2,400,000 x $7.60]		$ 18,240,000
	[To record repurchase and retired shares]
June 25, 2021	Common Stock [3,400,000 x $1]	$ 3,400,000
	Paid-in Capital - excess of par [3,400,000 x $3.4]	$ 11,560,000
	Cash [3,400,000 x $3.40]		$ 11,560,000
	Retained Earnings [Balance amount]		$ 3,400,000
	[To record repurchase and retired shares]

*Average Cost per share = (Common stock at $1 par + Paid in capital excess of par) ÷ No of Shares

=($79,600,000 + $270,640,000) ÷ 79,600,000

=$4.4

Paid in excess of par = $4.4 - $1 par = $3.4