Question

At January 1, 2022, ZZ Company reported the following stockholders'
equity accounts:

Common stock, $9 par ............................  $450,000
Paid-in capital – common stock ..................   125,000
Treasury stock (14,000 shares at $15 cost) ......   210,000
Paid-in capital – treasury stock ................    12,000
Retained earnings ...............................    58,000

During January, ZZ Company entered into the following transactions:

January 14   Re-issued 3,000 of the treasury shares for $9 per share

January 19   Re-issued 5,000 of the treasury shares for $16 per share

January 22   Issued 4,000 shares of previously un-issued common stock
             for $17 per share

January 29   Re-issued 2,000 of the treasury shares for $13 per share

Calculate the balance in the paid-in capital - treasury stock account
after all of the above transactions have been recorded. 

Answer 1

To find the balance in the paid-in capital - treasury stock account, journal entries related to treasury stock transactions should be prepared.

Journal

January 14	Cash	27,000
	Paid in capital from Treasury stock	12,000
	Retained earnings	6,000
	Treasury stock		45,000
January 19	Cash	80,000
	Treasury stock		75,000
	Paid in capital from Treasury stock		5,000
January 29	Cash	26,000
	Paid in capital from Treasury stock	4,000
	Treasury stock		30,000

 Balance in the paid-in capital - treasury stock account after all of the above transactions have been recorded = Paid in capital from Treasury stock, BEGINNING BALANCE - Paid in capital from Treasury stock debited on January 14 + Paid in capital from Treasury stock credited on January 19 - Paid in capital from Treasury stock debited on January 29

= 12,000 - 12,000 + 5,000 - 4,000

= $1,000

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