Calculate the number of shares issued

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Question - Treasury Stock

Transactions On Jan. 1, 2020, Gimme Corporation had the following balances in its shareholders' equity accounts:

Ordinary Shares, P5 par = 500,000

Share Premium-Ordinary = 2,000,000

Retained Earnings = 7,000,000

On March 28, the corporation purchased 10,000 shares as treasury stock at P15 per share.

On April 10, it sold 4,000 of the treasury shares at P14 per share.

On July 5, it sold 2,000 shares at P16 per share.

Required -

1. Calculate the number of shares issued and the number of shares outstanding on Jan. 1, Mar. 31, June 30, and Sept. 30, 2019 assuming no other equity transactions occurred.

2. Prepare the journal entries for the treasury stock transactions.

3. Why would a corporation buy its own shares of stock?

Reference no: EM132541166

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