In 2016, Winn, Inc., issued $1 par common stock for $35 per share. No other common stock transactions occurred until July 31, 2018, when Winn acquired some of the issued shares for $30 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement?
A) 2018 net income is decreased.
B) Additional paid-in capital is decreased.
C) 2018 net income is increased.
D) Retained earnings is increased.

Question

Quizplus · Accepted Answer

The entries to record the stock issuance and subsequent acquisition and retirement (per share) are as follows: 11ea937b_35ad_6d38_a419_59c898147e4b_TB2599_00 The net result is a decrease in additional paid-in capital of $29 per share retired.