Chauncy Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30

Question:

Chauncy Company has outstanding 40,000 shares of $5 par common stock which had been issued at $30 per share. Chauncy then entered into the following transactions.

1. Purchased 5,000 treasury shares at $45 per share.

2. Resold 2,000 of the treasury shares at $49 per share.

3. Resold 500 of the treasury shares at $40 per share.

Instructions

Use the following code to indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Chauncy Company uses the cost method: (I = Increase; D = Decrease; NE = Noeffect).

Chauncy Company has outstanding 40,000 shares of $5 par common

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...