Chapter 11, Problem 11.6ME

Determining the Effects of Treasury Stock Transactions

Carbide Corporation purchased 20,000 shares of its own stock from investors for $45 per share. The next year, the company resold 5,000 of the repurchased shares for $50 per share, and the following year it resold 10,000 of the repurchased shares for $37 per share. Determine the impact (increase, decrease, or no change) of each of these transactions on the following:

1. 1. Total assets
2. 2. Total liabilities
3. 3. Total stockholders’ equity
4. 4. Net income