How many shares of treasury stock does the corporation have? What does it represent? How does it affect stockholder's equity? AutoSaveAccounting 2102 Assessment Fall 2020 - ExcelO SearchMorgan Claire McGrew MC口FileHomeInsertDrawPage LayoutFormulasDataReviewViewHelpS ShareP CommentsCalibri14A A2 Wrap TextCurrencyE InsertΣPasteDeleteBIUEMerge & Center$ - %> 58 99Conditional Format as00CellSort & Find &IdeasSensitivityFormatting Table StylesFormatFilter Select -ClipboardFontAlignmentNumberStylesCellsEditingIdeasSensitivityG193402000AВH.KMRetaied Earnings: $250,000Treasury Stock: 8000 shares @ $2 per shareStockholder's Equity:6 Paid- In Capital:Preferred Stock 5%, $4 par (8000 sharesauthorized, 6000 isšued and outstanding)Excess of issue price over par8.$24,000.00$60,000.00Paid in Capital - PreferredCommon Stock, $2 par (200,000 shares authorized,125,000 issued)Excess of issue price over par10$84,000.001112$250,000.0013$1,250,000.00Paid - In Capital - Common Stock$1,500,000.0014Total Paid- In Capital$1,584,000.00$250,000.001516 Retained Earnings:17Total$3,418,000.0018 Treasury Stock (8000 shares at cost)19 Total Stockholder's Equity$16,000.00$3,402,000.002021InstructionsStockholder's Equity SectionQuestions100%1:30 PMP Type here to searcha11/25/2020124.5.

Introduction Treasury stock: Treasury stock is the company’s its own stock which company purchases from outstanding shares in the market. Company may decide to retire these shares or choose to hold them for resale in future dates. Treasury stock is the difference between issued stock and outstanding stock. When treasury stock is purchased, if we do not know par value, stock is valued at cost price otherwise valued at par value. So entries on purchase of treasury stock at cost price as follows. Treasury stock A/c DR [at cost price] To cash A/c .Number of common shares issued is equal to Number of common shares outstanding and number of shares bought back.Here corporation have 8,000 shares of treasury stock. It represents 8,000 common stock is purchased by company from outstanding shares in market. It is buyback of common stock of its own shares by the company. Treasury stock decreases amount of common stock and not retained earnings Purchase of treasury stock decreases total stockholders’ equity by the amount of the cost of the treasury stock.

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Stockholder's Equity: Paid - In Capital: Retaied Earnings: $250,000 Treasury Stock: 8000 shares @ $2 per share Preferred Stock 5%, $4 par (8000 shares authorized, 6000 isšued and oitstanding) Excess of issue price over par $24,000.00 $60.000.00 Paid in Capital - Preferred 11 Common Stock, $2 par (200,000 shares authorized, 125,000 issued) S৪4,000,00 $250,000.00 $1,250,000.00 12 13 Excess of issue price over par Paid - In Capital - Common Stock Total Paid - In Capital 16 Retained Earnings: 14 $1,500,000.00 $1,584,000.00 $250,000.00 15 17 Total $3,418,000.00 18 Treasury Stock (8000 shares at cost) 19 Total Stockholder's Equity $16,000.00 $3,402,000.00 20

Stockholder's Equity: Paid - In Capital: Retaied Earnings: $250,000 Treasury Stock: 8000 shares @ $2 per share Preferred Stock 5%, $4 par (8000 shares authorized, 6000 isšued and oitstanding) Excess of issue price over par $24,000.00 $60.000.00 Paid in Capital - Preferred 11 Common Stock, $2 par (200,000 shares authorized, 125,000 issued) S৪4,000,00 $250,000.00 $1,250,000.00 12 13 Excess of issue price over par Paid - In Capital - Common Stock Total Paid - In Capital 16 Retained Earnings: 14 $1,500,000.00 $1,584,000.00 $250,000.00 15 17 Total $3,418,000.00 18 Treasury Stock (8000 shares at cost) 19 Total Stockholder's Equity $16,000.00 $3,402,000.00 20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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