Please refer to the following information for Peartree Company:
If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, the company will record a loss of $2 per share on the transaction.

Question

Please refer to the following information for Peartree Company:
  If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, the company will record a loss of $2 per share on the transaction.

Quizplus · Accepted Answer

This statement does not make sense. If the company is purchasing treasury stock at a price higher than the recorded cost of the stock, it would result in a gain, not a loss. Therefore, the statement is false.

Please Refer to the Following Information for Peartree Company