HiTech Industries has a $11,800 credit balance in Paid-In Capital-Treasury Stock.It sells 1,000 shares of treasury stock,which the company reacquired at $58/share,for $52/share.After the transaction,what will the balance be in the Paid-In Capital in Excess of Par-Treasury account?

Question

Quizplus · Accepted Answer

The company sells the treasury stock at a loss of $6 per share ($58 - $52). For 1,000 shares, this results in a $6,000 loss. The loss is deducted from the Paid-In Capital-Treasury Stock account, reducing the $11,800 credit balance to a $5,800 credit balance.

HiTech Industries Has a $11,800 Credit Balance in Paid-In Capital-Treasury