Queen Creek Co.had total assets of $280,000,total liabilities of $168,000 and stockholders' equity of $112,000 before repurchasing 1,000 shares of its $1 par value common stock for $14 per share.After this repurchase,total assets equal ________,total liabilities equal ________ and stockholders' equity equals ________.

Question

Quizplus · Accepted Answer

The purchase of treasury stock would increase Treasury Stock,a contra-equity account,and decrease Cash,an asset.
Assets = Liabilities + Stockholders' Equity
[$280,000 − (1,000 shares × $14 per share)] = $168,000 + [$112,000 − (1,000 shares × $14 per share)]
$266,000 = $168,000 + $98,000