(Answered) Gentry corporation had the following stockholders equity

Accounting

Gentry Corporation had the following stockholders' equity accounts on January 1, 2010: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par Value $500,000, and Retained Earnings $100,000. In 2010, the company had the following treasury stock transactions.

Mar. 1 Purchased 5,000 shares at $7 per share.
June 1 Sold 1,000 shares at $10 per share.
Sept. 1 Sold 2,000 shares at $9 per share.
Dec. 1 Sold 1,000 shares at $5 per share.

Gentry Corporation uses the cost method of accounting for treasury stock. In 2010, the company reported net income of $80,000.

Instructions

(a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2010, for net income.

(b) Open accounts for

(1) Paid-in Capital from Treasury Stock,

(2) Treasury Stock, and

(3) Retained Earnings. Post to these accounts using J12 as the posting reference.

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