Question

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the balance in the Treasury Stock account on August 2?

Multiple Choice

• $5,050.

• $2,600.

• $100.

• $1,200.

• $0.

Answer 1

Answer is option D

D. $1200

Number of treasury stock on August 2 = 100 – 50 – 20 = 30 shares

Balance of treasury stock on August 2 = Number of treasury stock on August 2 * repurchased price per share = 30 shares * $40 per share = $1200