Ramos Corporation sold 400 shares of treasury stock for $45 per share.The cost for the shares was $35.The entry to record the sale will include a

Question

Quizplus · Accepted Answer

The correct entry includes a credit to Paid-in Capital from Treasury Stock for $4,000 because the sale price ($45) is higher than the cost ($35), resulting in a $10 gain per share. For 400 shares, this totals $4,000. This gain is not recognized as a gain in the income statement but rather as an increase in equity through Paid-in Capital from Treasury Stock.

Ramos Corporation Sold 400 Shares of Treasury Stock for $45