Problemmystic lake inc bottles and distributes spring water, Ask an Expert

Accounting

Problem

Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 43,800 shares of its common stock at $43 per share. On September 22, Mystic Lake Inc. sold 28,400 of the reacquired shares at $50 per share. The remaining 15,400 shares were sold at $42 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?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92759393

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