Is treasury stock an asset? If not, why not?
Question:
Step by Step Answer:
Treasury stock is not an asset because in many ways it is not different fr...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
Related Video
Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
Students also viewed these Accounting questions
-
Treasury stock should be reported as a current asset only if it will be sold within the next year or the operating cycle, whichever is shorter. As a deduction from total stockholders equity on the...
-
Treasury stock occurs when shares of common stock are bought back by the issuing company. Purchasing back one's own common stock with cash reduces the amount of the stock on the open market available...
-
Treasury Stock Indicate whether the following transactions increase, decrease, or have no effect on (a) Total assets and on (b) Total stockholders equity. _____ Issue 1,000 shares of common stock at...
-
AASB 102 prohibits the use of the LIFO method. What is the argument against the use of LIFO?
-
Allerton Company acquires all of Deluxe Company's assets and liabilities for cash on January 1, 2018, and subsequently formally dissolves Deluxe. At the acquisition date, the following book and fair...
-
Using the information in QS 1-18, prepare an income statement and statement of changes in equity for the month ended May 31, 2023, and a balance sheet at May 31, 2023. Data From QS 1-18 Paul Sangha...
-
Why did Congress pass the Health Care Quality Improvement Act of 1986?
-
Humble Company has provided the following budget information for the first quarter of 2016: Total sales ....................$ 208,000 Budgeted purchases of direct materials ....... 40,150 Budgeted...
-
The following inventory transactions took place for Sandhill Corporation for the month of May: Date Event Quantity Cost/Selling Price May 1 Beginning Inventory 1000 $3.90 May 5 Purchase 6000 3.45 May...
-
The data below present key ratios for six well-known U.S. corporations: Apple, Boeing, Citigroup, Facebook, McDonalds, and Walmart. However, the companies are not listed in order, and their names...
-
Why would a company repurchase its own shares of stock that it had previously issued?
-
How is treasury stock usually accounted for?
-
On January 1, 2011, the equity section of Rowen Corporation shows: share capital-ordinary (15 par value) 1,500,000; share premium-ordinary 1,000,000; and retained earnings 1,200,000. During the year,...
-
When companies have excess cash beyond their needs, they can return this money to shareholders in the form of a dividend or through a stock repurchase. Differentiate the effects of repurchases and...
-
Marcus Holloway has $7500 that he will use as a down payment on a car. Assuming that he can afford a payment of $625 per month, how much can Marcus spend on a car (that is, what is the total cost of...
-
Phone Corporation owns a 90% interest in Style Company, acquired several years ago at a cost equal to book value and fair value. Style sells merchandise to Phone for the first time in 2023, and some...
-
Fred Amigo, a resident taxpayer aged 58, is the recipient of a superannuation pension, which commenced on 1 July 2018. Theannualpension amountis$4O,OOO.PAYGtaxof$510waswithheldfrom the pension. ...
-
Critically analyze the AI's response. Discuss how you would revise and improve upon the information provided by the AI , incorporating your knowledge and insights as a financial expert.
-
You wish to drive a 1-k \(\Omega\) load from your car battery as shown in Figure P2-46. The load needs \(5 \mathrm{~V}\) across it to operate correctly. Where should the wiper on the potentiometer be...
-
Why is a help desk and production support critical to system implementations? Discuss its interrelationship with the problem management and reporting system.
-
As a team, select an industry to analyze. Using your web browser, each team member should access the annual report or 10-K for one publicly traded company in the industry, with each member selecting...
-
Revenue and expense data for the current calendar year for Shoesmith Electronics Company and for the electronics industry are as follows. The Shoesmith Electronics Company data are expressed in...
-
Revenue and expense data for the current calendar year for Shoesmith Electronics Company and for the electronics industry are as follows. The Shoesmith Electronics Company data are expressed in...
-
Balance sheet data for Bryant company on December 31, the end of the fiscal year, are shown below. Prepare a comparative balance sheet for 2012 and 2011, stating each asset as a percent of total...
-
Paddington Gifts made purchases of a particular product in the current year as follows: Jan. 1 Beginning inventory Mar. 7 Purchased July 28 Purchased Oct. 3 Purchased Totals Required: 200 units @...
-
what cognitive alchemy does the visionary transmute the leaden constraints of the present into the gilded opportunities of tomorrow, orchestrating symphonies of innovation amidst the cacophony of...
-
a) Propose the most appropriate type of leadership that the Coca Cola Company's top management should rely on to execute the strategy, based on the type of organizational culture and strategy. b)...
Study smarter with the SolutionInn App