Journalizing treasury stock transactions and reporting stockholders’ equity Southern Amusements Corporation had the following stockholders’ equity on November 30:
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STOCKHOLDERS’ EQUITY |
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Paid in capital: |
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Common stock, $5 par, 1,300 shares authorized, |
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900 shares issued |
$4,500 |
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Paid in capital in excess of par—common |
13,500 |
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Total paid in capital |
18,000 |
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Retained earnings |
57,000 |
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Total stockholders’ equity |
$75,000 |
On December 30, Southern purchased 275 shares of treasury stock at $14 per share.
Requirements
1. Journalize the purchase of the treasury stock.
2. Prepare the stockholders’ equity section of the balance sheet at December 31.
3. How many shares of common stock are outstanding after the purchase of treasury stock?