Discuss the propriety of showing: (a) Treasury stock as an asset. (b) Gain or loss on sale
Question:
Discuss the propriety of showing:
(a) Treasury stock as an asset.
(b) “Gain” or “loss” on sale of treasury stock as additions to or deductions from income.
(c) Dividends received on treasury stock as income.
Step by Step Answer:
a Treasury stock should not be classified as an asset since a corporation cannot own itself ...View the full answer
Intermediate Accounting
ISBN: 978-0470423684
13th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, And Terry D. Warfield
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
-
Calculate the dollar gain or loss on Treasury bond futures contracts ($100,000) per contract for the following transactions. In each case the position is held 6 months before closing it out. a. Sell...
-
Multiple Choice Questions 1. What is Golden's gain or loss on the cap (the change in time value) for the 6-month period ending December 31, 2013? a. $5, 000 gain b. $6, 000 loss c. $1, 000 loss d....
-
1. What is Alexander's net gain or loss on the liquidation of his 100 percent interest in an S corporation if the corporation distributes the following three assets to him in exchange for his stock:...
-
Prepare journal entries for each of the following transactions: 1. Purchase equipment in exchange for cash of $22,400. 2. Provide services to customers and receive cash of $5,100. 3. Pay the current...
-
In Brazil, a grove of oranges is picked using 20 workers, ladders, and baskets. In Florida, a grove of oranges is picked using 1 worker and a machine that shakes the oranges off the trees and scoops...
-
The recent Wall Street Journal article titled The Power of a Gentle Nudge cited a Stanford University study that researched the motivation of people to exercise. Participants were placed in one of...
-
A \(2000-\mathrm{kg}\) car burns gasoline with \(25 \%\) efficiency. Accelerating from rest, how fast would this car go upon burning \(0.040 \mathrm{~L}\) of gasoline if \(1.0 \mathrm{~L}\) of...
-
Azen Corporation issued $400,000, 7%, 20-year bonds on January 1, 2012, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1....
-
16. A uniform solid right circular cone of base radius R is joined to a uniform solid hemisphere of radius R and of the same density, so as to have a common face. The centre of mass of the composite...
-
On February 11, 20Y9, Quick Fix Company purchased $2,250 of supplies on account. In Quick Fixs chart of accounts, the supplies account is No. 15, and the accounts payable account is No. 21. a....
-
For what reasons might a corporation purchase its own stock?
-
What features or rights may alter the character of preferred stock?
-
1. Which of the different product mix pricing strategies discussed in the text applies best to Paylesss new strategy? Discuss this in detail. 2. How do concepts such as psychological pricing and...
-
How do effective leaders orchestrate the intricate process of team-building, integrating diverse talents, perspectives, and skills to form cohesive and high-performing teams capable of synergistic...
-
What innovative financial instruments and mechanisms show promise in catalyzing sustainable poverty reduction initiatives?
-
What are the efficacious methodologies for fostering equitable economic growth to uplift disadvantaged communities?
-
How can leaders foster a culture of collaboration and knowledge sharing within their teams, promoting interdisciplinary perspectives, cross-functional expertise, and a collective commitment to...
-
What are the ten elements that compromise a quality inclusive classroom environment for prekindergarten? explain the components in detail
-
Let \(\left\{f_{n}(x)ight\}_{n=1}^{\infty}\) be a sequence of real functions defined by \(f_{n}(x)=(1+\) \(\left.n^{-1}ight) \delta\{x ;(0,1)\}\) for all \(n \in \mathbb{N}\). a. Prove that \[\lim...
-
XYZ Inc. a calendar year, accrual basis corporation, had the following items during 2021: Gross revenue from operations Cost of goods sold $420,000 ($180,000) $9,000 LT capital gain .LT capital...
-
Repeat question 1 for the alternate AND gate symbol. Data from Question 1 Write the interpretation of the operation performed by the standard NOR gate symbol in Figure 3-33 Figure 3-33 AND OR NAND...
-
The following defined pension data of Doreen Corp. apply to the year 2010. Defined benefit obligation, 1/1/10 (before amendment) ......................................$560,000 Plan assets,...
-
Shin Corp. has beginning-of-the-year present values for its defined benefit obligation and fair values for its pension plan assets (amounts in thousands). The average remaining service life per...
-
Mildred Enterprises provides the following information relative to its defined benefit pension plan. Balances or Values at December 31, 2010 Defined benefit...
-
The number 456,123,789 can be written in scientific notation as the product of 4.56123789 and 108. That is, 456,123,789 = 4.56123789 10. The decimal point always immediately follows the first nonzero...
-
Cave Hardware's forecasted sales for April, May, June, and July are $210,000, $230,000, $110,000, and $290,000, respectively. Sales are 60 collected in the month following the sale. Cost of goods...
-
On February 1, 2024, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of $940,000. . The bonds sold for $859,357 and mature on January 31, 2044 (20 years). . The market yield...
Study smarter with the SolutionInn App