@jstay
I would reformat to make it easier to read….helped me out…
Cost method – used 95% of the time
· Treasury shares are recorded and carried at their acquisition cost
· Gain/loss will be determined when the treasury stock is reissued or retired
dr: Treasury stock xx (shares * acquisition price)
cr: Cash xx
Resell at gain
dr: Cash xx (amount received)
cr: TS xx (cost)
cr: APIC-TS xx (plug)
Resell at a loss and there is not enough is APIC to cover the loss
dr: Cash xx
dr: APIC-TS xx
dr: R/E xx (excess amount)
cr: TS xx (cost)
Present on B/S after R/E before stockholders equity total
Legal or par value method
· Treasury shares are recorded by reducing the amounts of par value and APIC received at the time of
original sale.
· Gain/loss immediately calculated upon repurchase
Repurchase at a gain
dr: Treasury stock xx (shares * original par value)
dr: APIC xx (shares * original APIC value)
cr: Cash xx (cash paid)
cr: APIC-TS xx (plug)
Repurchase at a loss
Treasury stock xx (shares * original par value)
dr: APIC xx (shares * original APIC value)
dr: R/E xx (plug)
cr: Cash xx (cash paid)
Never increase R/E, only decrease if necessary
Present on B/S after common stock
B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.
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