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Lava lake inc bottles and distributes spring water. om February 11 of the current year.Lava lake required 180,000 shares of common stock at$17 per share. on April 30th lava lake inc.sold 90,000 of reacquired shares at $20 per share. on August 22nd lava lnc sold 30,000 shares at $15 per share.
a. journalize the transactions of February 11,April 30 and August 22.
b. what is the balance in paid in capital from sale
treasury stock on December 31 of the current year?
c. for what reason might lava lake inc have purchased the treasury stock?

Respuesta :

Answer:

a. journalize the transactions of February 11,April 30 and August 22. attach.

b. what is the balance in paid in capital from sale

treasury stock on December 31 of the current year? 210000

c. for what reason might lava lake inc have purchased the treasury stock?

c.1 Probably tend to have  cash on hand to repurchase the stock. c.2 Purchasing treasury shares often returns capital to shareholders without the tax burden of paying dividends.

Explanation:

                                          deb cre

feb-11 Treasury Stock 3060000  

(180000*17)  

Cash                                         3060000

   

apr-30 Cash                1800000  

(90000*20)  

Treasury Stock                             1530000

(90000*17)  

Paid in capital for treasury stock       270000

   

aug-22 Cash                     450000  

(30000*15)  

Treasury Stock                                 51000 0

(30000*17)  

Paid capital treasury stock  60000  

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