Charmed, Inc. reacquired 7,000 shares of its $16-par common stock for $11/share. The debit to Treasury Stock will be:

Question

Quizplus · Accepted Answer

The debit to Treasury Stock is calculated by multiplying the number of shares reacquired by the price paid per share, which results in a total of $77,000 (7,000 shares x $11/share). Therefore, the correct answer is B. Option A is not correct because the amount of $35,000 would be the debit to Treasury Stock if the company had reacquired 3,500 shares instead of 7,000. Option C is not correct because the amount of $112,000 would be the debit to Treasury Stock if the company had reacquired 8,000 shares instead of 7,000. Option D is not correct because the last treasury stock transaction is not relevant to the current transaction.