On July 1, Wildhorse Co. purchases 560 shares of its $5 par value common stock for the treasury at a cash price of $10 per share. On September 1, it sells 370 shares of the treasury stock for cash at $11 per share. Required:Journalize the two treasury stock transactions.

Please see the journal entries for the two treasury stock transactions.

Explanation:

• Purchase of treasury stock

Treasury stock Dr $5,600

To Cash account Cr $5,600

(Being the purchase of treasury stock that is recorded)

For recording the above, treasury stock was debited because it increased the treasury while cash credited because it decreased the assets.

• Sale of treasury stock

Cash account Dr $4,070

To Treasury stock Cr $3,700

To paid in capital- treasury stock Cr $370

Explanation

° Purchase of treasury stock

Treasury stock

= 560 shares × $10 per share

= $5,600

° Sales of treasury stock

Cash receipt

= 370 shares × $11 per share

= $4,070

Treasury stock

= 370 shares × $10 per share

= $3,700

Paid in capital treasury stock

= 370 shares × ($11-$10)

= $370

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: