Question: What is treasury stock Why do corporations purchase their own
What is treasury stock? Why do corporations purchase their own shares? Is treasury stock an asset? How should it be reported in the balance sheet?
Answer to relevant QuestionsIn many states, corporation law requires that retained earnings be restricted for dividend purposes to the extent of the cost of treasury shares. What is the reason for this legal rule?Mega, Inc., has common and 6 percent preferred stock outstanding as follows: Preferred stock: 10,000 shares, $100 par value, cumulative Common stock: 50,000 shares, $50 par value The company declares a total dividend of ...Assume that you have recently obtained your scuba instructor’s certification and have decided to start a scuba diving school. a. Describe the advantages and disadvantages of organizing your scuba diving school as a: 1. ...Johnston, Inc., engaged in the following transactions involving treasury stock:Feb. 10 Purchased for cash 17,000 shares of treasury stock at a price of $25 per share.June 4 Reissued 6,000 shares of treasury stock at a price ...Maria Martinez organized Manhattan Transport Company in January 2008. The corporation immediately issued at $8 per share one-half of its 200,000 authorized shares of $2 par value common stock. On January 2, 2009, the ...
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