FAR 7_05B

  1. What are the journal entry accounts for the original issue of common stock?
    • [DR] Cash
    •   [CR] Common Stock (at par)
    •   [CR] APIC (for amounts received over par)
  2. What are the journal entry accounts for repurchase as treasury stock using the Cost Method?
    • [DR] Treasury Stock
    •   [CR] Cash
  3. What are the journal entry accounts if the treasury stock is reissued (sold) for a gain using the Cost Method?
    • [DR] Cash
    •   [CR] Treasury Stock (using the per share amount from the TStock purchase)
    •   [CR] APIC – T/S
  4. What are the journal entry accounts if the treasury stock is reissued (sold) for a loss using the Cost Method?
    • [DR] Cash
    • [DR] APIC-T/S (if a balance exists) OR Retained Earnings (if no APIC-T/S acct exists)
    •   [CR] Treasury Stock (using the per share amount from the TStock purchase)
  5. What are the journal entry accounts if the treasury stock is purchased with the intent to retire using the Cost Method?
    • [DR] Common Stock (at par)
    • [DR] APIC – CS (at original per share amount)
    • [DR] APIC – T/S (if a balance exists, and if the amount of the repurchase is more than the original issue amount) OR Retained Earnings (if no APIC – T/S balance exists)
    •   [CR] Treasury Stock
  6. What are the journal entry accounts if the treasury stock is repurchased for more than the original issue amounts when using the Legal or Par Method?
    • [DR] Treasury Stock (using the original par amount)
    • [DR] APIC – C/S (using the original per share amount)
    • [DR] APIC – T/S (if a balance exists) OR Retained Earnings (if no balance exists) for the amount over the original issue price
    •   [CR] Cash
  7. What are the journal entry accounts if the treasury stock is repurchased for less than the original issue amounts when using the Legal or Par Method?
    • [DR] Treasury Stock (using the original par amount)
    • [DR] APIC – C/S (using the original per share amount regardless of the repurchase amount. Do not net; meaning, if the original price is $15 with $10 par, and repurchased for $13, do not use $3 for this acct, use the original $5)
    •   [CR] APIC – T/S (to adjust for the amount that is less than the original issue price)
    •   [CR] Cash
  8. What are the journal entry accounts if the treasury stock is reissued for more than the repurchase amounts when using the Legal or Par Method?
    • [DR] Cash
    •   [CR] Treasury Stock (using original par amount)
    •   [CR] APIC – C/S (note that the benefits go back to the Common Stock acct)
  9. What are the journal entry accounts if the treasury stock is reissued for less than the repurchase amounts when using the Legal or Par Method?
    • [DR] Cash
    •   [CR] Treasury Stock (using original par amount)
    •   [CR] APIC – C/S (note that the benefits go back to the Common Stock acct)
  10. Where on the Balance Sheet is the Treasury Stock presented when using the Cost Method vs the Par Value Method?
    • Cost Method: The last entry before calculating Total Stockholder’s Equity
    • Par Value (Legal) Method: As an adjustment to CS at par value (typically the 2nd line)
  11. When is Treasury Stock considered retired?
    When the entity has the intent to retire the stock, even if that doesn’t occur.
  12. What are the journal entry accounts for a repurchase of stock with intent to retire when using the Cost Method?
    • [DR] Common Stock (at original par)
    • [DR] APIC – C/S (at original per share amount)
    • [DR] APIC – T/S (if a balance exists) OR Retained Earnings (if no balance) for any amount over the original price OR
    •   [CR] APIC – T/S OR Retained Earnings for any amount less than the original price
    •   [CR] Treasury Stock
  13. What are the journal entry accounts for a repurchase of stock with intent to retire when using the Legal Method?
    • [DR] Common Stock (at original par)
    •   [CR] Treasury Stock (at original par)
  14. What are the journal entry accounts and what amounts are used for donated stock?
    • [DR] Donated Treasury Stock (at fair value for the stock)
    •   [CR] APIC (at fair value for the stock)
  15. Donated stock is sold. What are the journal entry accounts?
    • [DR] Cash (at sales price)
    • [DR] APIC (if sales price is < original FMV) for the loss
    •   [CR] APIC (if sales price is > original FMV) for the gain
    •   [CR] Donated Treasury Stock
Author
BethM
ID
338105
Card Set
FAR 7_05B
Description
Becker Review 2018
Updated