On November 21 of the current year, Maroon Inc.reacquired 50,000 shares of its common stock at $4 per share.As a result of this transaction, net assets of the company:

Question

Quizplus · Accepted Answer

When a company reacquires its own stock, it is essentially buying back some of its ownership. This reduces the number of outstanding shares, which in turn increases the value of each remaining share. However, it also means that the company has fewer assets (in the form of stocks) and more cash. In this case, the company spent $200,000 to buy back 50,000 shares, so its net assets decreased by that amount. Therefore, choice B is the correct answer.

On November 21 of the Current Year, Maroon Inc