ZYX reported:

Common stock outstanding, 1,000 shares (par $20) $20,000

Contributed capital in excess of par 1,000

Retained earnings 50,000

A) ZYX bought 15 shares to be held as treasury stock for cash at $25 per share.

B) Sold 5 of the treasury shares at $27 per share

Required:

1. Give all entries required, assuming the par value method is used:

Par value method:

A)

Treasury stock (15 x $20)............................300

Contributed capital in excess of par (15 x $1)........15

Retained earnings (to balance)..................60   

Cash (15 x $25)......................................375

B)

Cash (5 x $27)........................................135

Treasury stock (5 x $20).................100

Contributed capital in excess of par...........35

Cost Method:

A) Treasury stock (15 x $25)........375

Cash (15 x $25).................375

B) Cash (5 x $27)...............135

Treasury stock (5................125

Contributed capital from treasury stock trans................1