A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...

Question

Question

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

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Treasury stock being a contra account, reduces the stockholders equity

Decrease

= 5,000 shares * 35

= 175,000

Option D is the answer

Add a comment

Answer 2

Similar Homework Help Questions

A corporation purchases 8,828 shares of its own $2 par common stock for $15 per share,...

A corporation purchases 8,828 shares of its own $2 par common stock for $15 per share, recording it at cost. What will be the effect on total stockholders' equity? a.decrease by $114,764 b.increase by $114,764 c.increase by $132,420 d.decrease by $132,420
Subara Corporation purchases 1,000 shares of its own $10 par value stock for $15 per share....

Subara Corporation purchases 1,000 shares of its own $10 par value stock for $15 per share. The transaction is recorded using the cost method 15. Proper recording of this transaction will A) result in a decrease in stockholders’ equity B) result in a decrease in net income C) result in an increase in investments D) include a debit to an Additional Paid-In Capital for $5,000 16. Assume that Subara reissued the stock for $14 per share. Which of the following...
A corporation issued 5,000 shares of its no par common stock that was assigned a $1...

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000. Debit Cash $50,000; credit Common Stock $50,000. Debit Common Stock $50,000; credit Cash $50,000. Debit Treasury Stock $50,000; credit Cash $50,000. Debit Common Stock $25,000; debit Paid-in...

shares of its no-par common stock at $20 per share. Without making journal entries, determine the...

shares of its no-par common stock at $20 per share. Without making journal entries, determine the total paid-in capital created by these transactions. E13-21 Journalizing issuance of stock Steller Systems completed the following stock issuance transactions: May 19 Jun. 3 11 Issued 1,700 shares of $3 par value common stock for cash of $10.50 per share. Issued 300 shares of $9, no-par preferred stock for $15,000 cash. Received equipment with a market value of $68,000 in exchange for 5,000 shares...
A company issued 3,000 shares of its $10 par value common stock at $15 per share...

A company issued 3,000 shares of its $10 par value common stock at $15 per share and 5,000 shares of its $20 par value preferred stock at $25 per share. What was the legal capital raised from these stock issuance? a. $170,000 O b. $130,000 O c. $45,000 d. $145,000
At its date of incorporation, Coronado Industries issued 120000 shares of its $10 par common stock...

At its date of incorporation, Coronado Industries issued 120000 shares of its $10 par common stock at $12 per share. During the current year, Coronado acquired 21200 shares of its common stock at a price of $17 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $13 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock...

1. On February 10, the corporation purchases back 2,000 shares of its own common stock for...

1. On February 10, the corporation purchases back 2,000 shares of its own common stock for $50 per share. The entry to record the purchase would indlude a a. debit to Cash for $100,000 b. credit to Treasury Stock for $100,000 c. debit to Treasury Stock for $100,00 d. debit to Common Stock for $100,000 2. A corporation may reacquire (purchase) its own stock for which of the following reasons? a. To provide shares for resale to employees b. To...
Coastal Corporation issued 25,000 shares of $11 par value common stock at $22 per share and...

Coastal Corporation issued 25,000 shares of $11 par value common stock at $22 per share and 6,000 shares of $56 par value, eight percent preferred stock at $84 per share. Later, the company purchased 3,000 shares of its own common stock at $26 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $30 per share. Prepare the general...
In 2020, Concord Corporation acquired 15500 shares of its own $1 par value common stock at...

In 2020, Concord Corporation acquired 15500 shares of its own $1 par value common stock at $19 per share. In 2021, Concord issued 10500 of these shares at $24 per share. Concord uses the cost method to account for its treasury stock transactions. What accounts and what amounts should Concord credit in 2021 to record the issuance of the 10500 shares? Treasury Stock Additional Paid-in Capital Retained Earnings Common Stock

Treasury Stock Coastal Corporation issued 25,000 shares of $8 par value common stock at $20 per...

Treasury Stock Coastal Corporation issued 25,000 shares of $8 par value common stock at $20 per share and 6,000 shares of $53 par value, eight percent preferred stock at $61 per share. Later, the company purchased 3,000 shares of its own common stock at $23 per share. a. Prepare the journal entries to record the share issuances and the purchase of the common shares. b. Assume that Coastal sold 2,000 shares of the treasury stock at $29 per share. Prepare...

A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...

Homework Answers

Add Answer to:
A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...

Post as a guest

Earn Coins

A corporation purchases 8,828 shares of its own $2 par common stock for $15 per share,...

Subara Corporation purchases 1,000 shares of its own $10 par value stock for $15 per share....

A corporation issued 5,000 shares of its no par common stock that was assigned a $1...

shares of its no-par common stock at $20 per share. Without making journal entries, determine the...

A company issued 3,000 shares of its $10 par value common stock at $15 per share...

At its date of incorporation, Coronado Industries issued 120000 shares of its $10 par common stock...

1. On February 10, the corporation purchases back 2,000 shares of its own common stock for...

Coastal Corporation issued 25,000 shares of $11 par value common stock at $22 per share and...

In 2020, Concord Corporation acquired 15500 shares of its own $1 par value common stock at...

Treasury Stock Coastal Corporation issued 25,000 shares of $8 par value common stock at $20 per...

A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...

Homework Answers

Add Answer to: A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...

Post as a guest

Earn Coins

Add Answer to:
A corporation purchases 5,000 shares of its own $20 par common stock for $35 per share,...