On May 27, Hydro Clothing Inc. reacquired 75,000 shares of its common stock at $8 per share. On August 3, Hydro Clothing

On May 27, Hydro Clothing Inc. reacquired 75,000 shares of its common stock at $8 per share. On August 3, Hydro Clothing sold 54,000 of the reacquired shares at $11 per share. On November 14, Hydro Clothing sold the remaining shares at $7 per share.

Journalize the transactions of May 27, August 3, and November 14.


Answer:













May 27 Treasury Stock (75,000 shares × $8) 600,000
Cash 600,000
Aug. 3 Cash (54,000 shares × $11) 594,000
Treasury Stock (54,000 shares × $8) 432,000
Paid-In Capital from Sale of
Treasury Stock [54,000 shares × ($11 – $8)] 162,000
Nov. 14 Cash (21,000 shares × $7) 147,000
Paid-In Capital from Sale of
Treasury Stock [21,000 shares × ($8 – $7)] 21,000


Olde Wine Corporation has 250,000 shares of $40 par common stock outstanding. On February 15, Olde Wine Corporation declared a 2% stock dividend to be issued May 2 to stockholders of record on March 27. The market price of the stock was $52 per share on February 15.

Journalize the entries required on February 15, March 27, and May 2.


Answer:











Feb. 15 Stock Dividends (250,000 shares × 2% × $52) 260,000
Stock Dividends Distributable (5,000 shares × $40) 200,000
Paid-In Capital in Excess of Par—
Common Stock [$5,000 shares × ($52 – $40)] 60,000
Mar. 27 No entry required.
May 2 Stock Dividends Distributable 200,000
Common Stock 200,000