Ross Corporation reported the following equity section on its current balance sheet: $$\begin{array} { | l | r | }
\hline \text { Common stock, } \$ 5 \text { par, } 200,000 \text { shares authorized, } & \
160,000 \text { shares issued } & \$ 800,000 \
\hline \text { Paid in capital in excess of par - common } & 200,000 \
\hline \text { Retained earnings } & \underline { 207,000 } \
\hline \text { Total stockholders'equity } & \$ 1,207,000 \
\hline
\end{array}$$ Which of the following would be included in the entry to record the corporation's purchase of 100,000 shares of its common stock for $7.50 per share?

Question

Ross Corporation reported the following equity section on its current balance sheet: $$\begin{array} { | l | r | } 
\hline \text { Common stock, } \$ 5 \text { par, } 200,000 \text { shares authorized, } & \
160,000 \text { shares issued } & \$ 800,000 \
\hline \text { Paid in capital in excess of par - common } & 200,000 \
\hline \text { Retained earnings } & \underline { 207,000 } \
\hline \text { Total stockholders'equity } & \$ 1,207,000 \
\hline
\end{array}$$ Which of the following would be included in the entry to record the corporation's purchase of 100,000 shares of its common stock for $7.50 per share?

Quizplus · Accepted Answer

The purchase of treasury stock is recorded by debiting the Treasury Stock account for the total cost of the shares purchased, which is 100,000 shares times $7.50 per share, totaling $750,000.

Ross Corporation Reported the Following Equity Section on Its Current