A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?
A) $0
B) $5,000
C) $2,500
D) $10,000

Question

Quizplus · Accepted Answer

The sale of treasury stock (stock that a corporation has issued and then reacquired) does not generate revenue for the company. Instead, it affects the equity section of the balance sheet. Transactions involving treasury stock are accounted for as equity transactions, not as revenue transactions.

A Corporation Purchased 1,000 Shares of Its Own $5 Par