contestada

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 40,000 shares of its common stock at $44 per share. On September 22, Mystic Lake Inc. sold 30,000 of the reacquired shares at $50 per share. The remaining 10,000 shares were sold at $43 per share on November 23.

Required:

A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
B. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year?
C. For what reasons might Mystic Lake have purchased the treasury stock?

Respuesta :

cancinodavidq

Answer:

Check the following explanation

Explanation:

A- take a look to the archive attached

B- Balance in Paid in capital= $170000 ($180000-$10000)

C- Reasons for purchase of treasury stock-

1- When a company is forced to buy back shares from someone who is attempting to gain control of the business.

2- A business has no alternative use for excess cash, and so elects to use it on a stock repurchase.

3- When management wants to take a publicly-held company private, and needs to reduce the number of shareholders in order to do so.

4- A stock buyback program that is intended to reduce the overall number of shares and thereby increase the earnings per share. This action can also increase the price of the stock, especially if a company has a policy of buying its own shares whenever the price falls below a certain threshold level.

Ver imagen cancinodavidq

Otras preguntas

Q&A Education