How many shares of treasury stock was purchased at $33 per share?
• Treasury Stock: 11,000 shares purchased at $33 per share If Tangent resold 1,300 shares of treasury stock for $23.00 per share, which of the following statements would be true? Answers: A. The Retained Earnings account would increase by $29,900. B. The Treasury Stock account would decrease by $42,900. C.
What would happen if tangent resold 1,300 shares of treasury stock?
If Tangent resold 1,300 shares of treasury stock for $23.00 per share, which of the following statements would be true? Answers: A. The Retained Earnings account would increase by $29,900.
What is the par value of treasury stock under cost method?
The par value of shares is ignored for recording the purchase of treasury stock under cost method. For example, Eastern company repurchases 2,500 shares of its own common stock from stockholders. The par value per share is $10 and company reacquires it for $80 .The entry for this transaction would be made as follows:
What is the cost method for treasury stock?
Under cost method, the treasury stock account is debited and cash account is credited with the amount paid for acquiring the shares of treasury stock (i.e., the cost of treasury stock).
What happens if treasury stock is reissued at a price above cost?
If treasury stock is reissued at a price above cost: If the shares from treasury stock are reissued at a price that is higher than their cost, the difference is credited to additional paid-in capital. The journal entry is given below:
What is treasury stock?
Sometime companies purchase their own shares of stock from stockholders of the company. Such repurchased shares of stock are known as treasury stock. It includes only those shares that have not been cancelled or permanently retired by the company after repurchase.
What happens if treasury shares are reissued?
If the shares from treasury stock are reissued at a price that is lower than their cost, the difference is debited to additional paid-in capital. The journal entry is given below:
Do treasury stock have voting rights?
The shares held as treasury stock are not entitled to receive dividends and share of assets upon dissolution of the company. Also, these shares have no voting rights. Two methods are used for accounting treatment of treasury stock – the cost method and the par value method.
Is treasury stock an asset?
Treasury stock is not an asset, it is a contra-equity account that is reported as a deduction in the stockholders’ equity section of the balance sheet. In above example, treasury stock purchased by Eastern company should appear in the balance sheet as follows:
What is stockholder equity?
a share of common stock. Stockholders' equity is divided into: retained earnings and paid-in capital. retained earnings and common stock. assets and liabilities. common stock and preferred stock.
Does preferred stock have a maturity date?
preferred stock does not have a maturity date whereas debt usually has a maturity date. all of the above. all of the above. The difference between the issue price per share of common stock and the par value per share of the stock is credited to: Retained Earnings. Common Stock. Paid-in Capital in Excess of Par—Common.
Is preferred stock a debt?
Preferred stock is NOT similar to debt because: preferred dividends are not tax-deductible whereas interest expense is tax-deductible. preferred dividends do not have to be paid whereas interest expense must be paid. preferred stock does not have a maturity date whereas debt usually has a maturity date.