Treasure This,Inc.had total assets of $100,000,total liabilities of $60,000 and stockholders' equity of $40,000 before repurchasing 1,000 shares of its $1 par value common stock for $5 per share.After this repurchase,total assets equal _____,total liabilities equal ______ and stockholders' equity equals ______:

Question

Quizplus · Accepted Answer

The repurchase of shares reduces total assets by the cost of the shares ($5,000) and reduces stockholders' equity by the same amount, as it is a treasury stock transaction. Total liabilities remain unchanged.