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Topic
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Kuchman Kookware issued 40,000 shares of its $8.00 par value common stock for $9 on January 1, Year 1. Kuchman repurchased 1,000 shares at $8 per share on April 1, Year 2, resold 500 shares at $9 per share on July 1, Year 2, and, on October 1, Year 2, resold the final 500 shares at $5 per share. Assuming Kuchman uses the par value method of accounting for its treasury stock, retained earnings at December 31. Year 2 would be reduced by:
a. $0
b. $500
c. $1,500
d. $1,000
I thought the answer was D but it is B. Wondering where I went wrong. Here is my work:
DR Cash 360,000
……CR C/S 320,000
……CR Apic 40,000
DR T/S 8,000 (par value is same as rebuy price)
…….CR Cash 8,000
DR Cash 4,500
…..CR T/s 4,000
……CR APIC 500
DR Cash 2,500
DR Apic 500
DR RE 1,000
……….CR TS 4000
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BEC - 77, 03/2015 (first try)
FAR - 79, 05/2015 (second try)
REG - 83, 12/2015 (first try)
AUD - 84, 03/2015 (first try)I got 99 problems but the CPA ain't one.
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