Impact Trading Inc. reacquires 1000 shares at a cost of $2 per share. The average cost per share is $2.50. In this case, Impact Trading: 1. Gains $500, debited to Contributed Capital - Reacquired Shares 2. Loses $0.50 per reacquired share 3. Takes a $2000 loss, debited to Contributed Capital - Reacquired Shares 4. Gains $500, credited to Contributed Capital - Reacquired Shares 5. None of the answers are correct

Q: 2)

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.