(4), May 8, Purchased $9,000 merchandise (900 units) on credit. (5), May 15, Sold 500 units of merchandise at the price of $11,000. Customer paid $8,000 in To record the cost of goods sold ($5,000 merchandise). (6), Salaries Expense. 2,500. (6), Cash. 3,500 Treasury stock (Cost method, par value method). Dividends Cash (400 × $8) 3,200 Treasury stock (400 × $5) 2,000 Paid-in capital from treasury stock stock outstanding): Income from continuing operations [($23,800 - $3,000 x $10 = $3,500 Chapter 13 Corporations: Effects on Retained Earnings and the 205 2 The managers purchased the stock at $7 and could sell it for $52.