Sheridan Company purchased its own par value stock on January 1, 2020 for $19700 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $10900. The $8800 difference between the cost and sales price should be recorded as a deduction from a. additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein. b. retained earnings. c. net income. d. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
Sheridan Company purchased its own par value stock on January 1, 2020 for $19700 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $10900. The $8800 difference between the cost and sales price should be recorded as a deduction from a. additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein. b. retained earnings. c. net income. d. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheridan Company purchased its own par value stock on January 1, 2020 for $19700 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $10900. The $8800 difference between the cost and sales price should be recorded as a deduction from
a. additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein.
b. retained earnings .
c. net income.
d. additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
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