The original sale of the $50 par value common shares of Special Nail Polish Company was recorded as follows:

| November 24, 2016

Question
1. Treasury stock transactions.
The original sale of the $50 par value common shares of Special Nail Polish Company
was recorded as follows:

Cash………………………………………………………………………………….
Common Stock………………………………………………………..
250,000
Paid in Capital in Excess of
Par…………………………………

290,000
40,000

Instructions
Record the treasury stock transactions (given below)under the cost
method:
Transactions:
(a) Bought350sharesofcommonstockastreasurysharesat$62.
(b) Sold100sharesoftreasurystockat$60.
(c) Sold50treasurysharesat$68.
2. Lumpsumissuanceofstock.
Harvey Window Corporation has issued 2,000 shares of common stock and 400 shares
of preferred stock for a lump sum of $76,000 cash.

Instructions
(a) Givetheentryfortheissuanceassumingtheparvalueofthecommonwas$5andthe
fairvalue$30,andtheparvalueofthepreferredwas$40andthefairvalue$50.
(Eachvaluationisonapersharebasisandtherearereadymarketsforeachstock.)
(b) Give the entry for the issuance assuming the same facts as (a) above except the
preferredstockhasnoreadymarketandthecommonstockhasafairvalueof$26per
share.

3.Payroll
LeblancsHardwareCompanyhas35employeeswhowork8hourdaysandarepaid
hourly.OnJanuary1,2014,thecompanybeganaprogramofgrantingitsemployees10
daysofpaidvacationeachyear.Vacationdaysearnedin2014mayfirstbetakenon
January1,2015.Informationrelativetotheseemployeesisasfollows:
Year
2014
2015
2016

Hourly
Wages
$21.50
22.50
23.75

VacationDaysEarned
byEachEmployee
10
10
10

VacationDaysUsed
byEachEmployee
0
8
10

Vargashaschosentoaccruetheliabilityforcompensatedabsencesatthecurrentratesof
payineffectwhenthecompensatedtimeisearned.
1.)What is the amount of expense relative to compensated absences that should be
reportedonVargassincomestatementfor2014?
2.)Whatistheamountoftheaccruedliabilityforcompensatedabsencesthatshouldbe
reportedatDecember31,2016

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