Elton Manufacturing Corporation purchased 4,000 shares of its own previously issued $10 par ordinary shares for $92,000.As a result of this event,

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When a company repurchases its own shares, it reduces its total equity by the cost of the shares repurchased, which is $92,000 in this case. The Share Capital-Ordinary account does not decrease because the shares are held in treasury, not retired.

Elton Manufacturing Corporation Purchased 4,000 Shares of Its Own Previously