Palp Corporation had 300,000 shares of common stock outstanding. It owned 75% of the outstanding common stock of Shill Company. Shill owned 20,000 shares of Palp's outstanding common stock. In the consolidated balance sheet of Palp Corporation and subsidiary, Palp's common stock is reported as:

Question

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In consolidated financial statements, shares of the parent company owned by a subsidiary are treated as treasury stock. Therefore, while Palp Corporation has 300,000 shares issued, the 20,000 shares owned by Shill are considered treasury stock, leaving 280,000 shares outstanding.

Palp Corporation Had 300,000 Shares of Common Stock Outstanding