Please refer to the following information for Peartree Company: If Peartree resold 800 shares of treasury stock for $15 per share, which of the following statements would be TRUE?

Question

Please refer to the following information for Peartree Company:  If Peartree resold 800 shares of treasury stock for $15 per share, which of the following statements would be TRUE?

Quizplus · Accepted Answer

When Peartree resold 800 shares of treasury stock, it resulted in a cash inflow of $15 per share, which is $12,000 in total. Since treasury stock is a contra-equity account, selling it will increase the equity of the company. Thus, the total equity of the company would go up by $12,000.

Please Refer to the Following Information for Peartree Company