A corporation purchases 41500 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders’ equity? Increase by $1245000 Decrease by $1867500 Increase by $1867500 Decrease by $1245000

A corporation purchases 41500 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders’ equity? Increase by $1245000 Decrease by $1867500 Increase by $1867500 Decrease by $1245000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 21DQ

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A corporation purchases 41500 shares of its own $30 par common stock for $45 per share, recording it at cost. What will be the effect on total stockholders’ equity?

Increase by $1245000

Decrease by $1867500

Increase by $1867500

Decrease by $1245000

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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