Refer to the following information for Tangent Corporation: If Tangent resold 1,200 shares of treasury stock for $14.5 per share,which of the following statements would be true?

Question

Refer to the following information for Tangent Corporation:  If Tangent resold 1,200 shares of treasury stock for $14.5 per share,which of the following statements would be true?

Quizplus · Accepted Answer

When 1,200 shares of treasury stock are resold for $14.5 per share, the total amount received is $17,400 (1,200 shares x $14.5 per share). As a result, the Treasury Stock account would go down by $17,400 (the cost of the treasury stock), not $12,000. Additionally, there would be no impact on the Paid-In Capital in Excess of Par-Common account, as the stock was sold for less than the par value. Finally, there would be no impact on the Retained Earnings account, as the sale of treasury stock does not affect earnings. The correct statement is therefore: The Treasury Stock account would go down by $17,400.

Refer to the Following Information for Tangent Corporation: If