Question

On October 10, the stockholders' equity of Sherman Systems appears as follows. Common stock-$10 par value, 76,000 shares authorized, issued, and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 760,000 236,000 896,000 $1,892,000 1. Prepare journal entries to record the following transactions for Sherman Systems. a. Purchased 5,400 shares of its own common stock at $29 per share on October 11. b. Sold 1,100 treasury shares on November 1 for $35 cash per share. c. Sold all remaining treasury shares on November 25 for $24 cash per share. View transaction list Journal entry worksheet 2 3 Record the purchase of 5,400 shares of its own common stock for $29 cash per share. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal

Answer 1

Solution 1:

Journal Entries - Sherman Systems
Date	Particulars	Debit	Credit
11-Oct	Treasury stock Dr	$156,600.00
	To Cash		$156,600.00
	(To record purchase of own stock)
1-Nov	Cash Dr	$38,500.00
	To Treasury stock		$31,900.00
	To Paid in capital from treasury stock		$6,600.00
	(To record sale of treasury stock)
25-Nov	Cash Dr	$103,200.00
	Paid in capital from treasury stock Dr	$6,600.00
	Retained earnings Dr	$14,900.00
	To Treasury stock		$124,700.00
	(To record sale of treasury stock)

Solution 2:

Stockholder Equity Section of Balance sheet
Sherman Systems at October 11
Particulars	Amount
Stockholders Equity:
Common stock—$10 par value, 76,000 shares authorized, issued and outstanding	$760,000.00
Paid-in capital in excess of par value, common stock	$236,000.00
Total contributed Capital	$996,000.00
Retained Earnings	$896,000.00
Total	$1,892,000.00
Treasury stock	-$156,600.00
Total Stockholder's Equity	$1,735,400.00