Using the following accounts and balances, prepare the Stockholders Equity section of the balance sheet. Thirty thousand
Question:
Using the following accounts and balances, prepare the Stockholders’ Equity section of the balance sheet. Thirty thousand shares of common stock are authorized, and 2,000 shares have been reacquired.
Common Stock, $80 par ..........$2,000,000
Paid-In Capital in Excess of Par ....... 315,000
Paid-In Capital from Sale of Treasury Stock ... 33,000
Retained Earnings .............. 1,112,000
Treasury Stock .............. 180,000
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...
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Paidin capital Common stock 80 par 30000 shares authorized 25000 sha...View the full answer
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
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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.
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