Ross Corporation reported the following equity section on its current balance sheet: 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:  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

When a company purchases its own stock, it is recorded in the Treasury Stock account on the balance sheet as a reduction in the Equity section. To record the purchase of 100,000 shares of its common stock for $7.50 per share, the Treasury Stock-Common account would be debited for $750,000 (100,000 shares x $7.50 per share). Therefore, choice A is correct. Choices B, C, and D are incorrect because they do not accurately reflect the accounting treatment for the purchase of treasury stock.

Ross Corporation Reported the Following Equity Section on Its Current