Edgewater Co.has the following December 31,2018 equity balances: Common stock of $56,000;Additional paid-in capital of $84,000;and Retained earnings of $140,000.If Edgewater repurchases shares of its stock for $28,000,the total stockholders' equity balance would equal:

Question

Quizplus · Accepted Answer

The purchase of treasury stock would increase Treasury Stock,a contra-equity account,and decrease Cash,an asset.
Stockholders' Equity = Common stock + Additional paid-in capital − Treasury stock + Retained earnings
= $56,000 + $84,000 − $28,000 + $140,000 = $252,000