Ladder Distributors
The stockholders' equity section of the December 31, 2019, balance sheet is provided below:
Assume that all of the 20,000 shares of stock that was issued as of December 31, 2019, was issued for $42 per share. On March 1, 2020, the company reacquired 4,000 shares of its common stock for $50 per share.
-Refer to Ladder Distributors. How much should be reported on the company's March 31, 2020, balance sheet for treasury stock?

Question

Ladder Distributors
The stockholders' equity section of the December 31, 2019, balance sheet is provided below:
  Assume that all of the 20,000 shares of stock that was issued as of December 31, 2019, was issued for $42 per share. On March 1, 2020, the company reacquired 4,000 shares of its common stock for $50 per share.
-Refer to Ladder Distributors. How much should be reported on the company's March 31, 2020, balance sheet for treasury stock?

Quizplus · Accepted Answer

To determine the amount that should be reported on the company's March 31, 2020, balance sheet for treasury stock, we need to calculate the cost of the shares that the company reacquired.
The company reacquired 4,000 shares of its common stock on March 1, 2020, for $50 per share. To find the total cost of the treasury stock, we multiply the number of shares reacquired by the price per share:
4,000 shares x $50/share = $200,000
Therefore, the amount that should be reported on the company's March 31, 2020, balance sheet for treasury stock is $200,000.
The correct answer is:
d. $200,000

Ladder Distributors The Stockholders' Equity Section of the December 31, 2019, Balance