Laserspot is involved in producing and selling high-end golf equipment. the company has recently been involved in developing various types of laser guns to measure yardages on the golf course. one small laser gun, called littlelaser, appears to have a very large potential market. because of competition, laserspot does not believe that it can charge more than $80 for littlelaser. at this price, laserspot believes it can sell 100,000 of these laser guns. littlelaser will require an investment of $7,500,000 to manufacture, and the company wants an roi of 16%.

On january 1, vermont corporation had 40,000 shares of $10 par value common stock issued and outstanding. all 40,000 shares has been issued in a prior period at $20.00 per share. on february 1, vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on march 1. the journal entry to record the purchase of the treasury shares on february 1 would include a credit to treasury stock for $90,000 debit to treasury stock for $90,000 credit to a gain account for $112,500 debit to a loss account for $112,500