XHC had only two share transactions.Initially,XHC issued 1,000 common shares,at $15 per share.XHC later bought back 200 shares at $16 per share.Under the single-transaction method,what is the amount that should be recorded in the treasury stock account?

Question

Quizplus · Accepted Answer

Under the single-transaction method, the amount recorded in the treasury stock account is calculated by subtracting the buyback price per share from the original issuance price per share and then multiplying the result by the number of shares repurchased.

In this case, the difference between the buyback price and issuance price is $1 per share ($16 - $15). XHC repurchased 200 shares, so the amount recorded in the treasury stock account would be:

$1 per share x 200 shares = $200
$200 + $3,000 (original issuance cost) = $3,200.

Therefore, the best choice is C.

XHC Had Only Two Share Transactions