A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...
A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholder's equity?
a. Increase $175,000
b. Increase $350,000
c. Decrease $350,000
d. Decrease $175,000
Homework Answers
Treasury stock being a contra account, reduces the stockholders equity
Decrease
= 5,000 shares * 35
= 175,000
Option D is the answer
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