Table 14-3
Following is the shareholders' equity section of the balance sheet of Monty Corporation:
$$\begin{array} { | l| r | }
\hline \text { Contributed capital: } & \
\hline \text { Preferred shares, } \$ 2.50 \text {, cumulative, } 35,000 \text { shares } & \
\hline \text { authorized, } 7,000 \text { shares issued } & \$ 350,000 \
\hline \text { Common shares, } 140,000 \text { shares authorized, } & \
\hline 50,000 \text { shares issued } & 452,500 \
\hline\
\hline \text { Total contributed capital } & 802,500 \
\hline \text { Retained earnings } & 204,500 \
\hline \text { Total shareholders' equity } & \$ 1,007,000 \
\hline
\end{array}$$
-The sale of a corporation's repurchased shares:

Question

Table 14-3
Following is the shareholders' equity section of the balance sheet of Monty Corporation:
 $$\begin{array} { | l| r | } 
\hline \text { Contributed capital: } & \
\hline \text { Preferred shares, } \$ 2.50 \text {, cumulative, } 35,000 \text { shares } & \
\hline \text { authorized, } 7,000 \text { shares issued } & \$ 350,000 \
\hline \text { Common shares, } 140,000 \text { shares authorized, } & \
\hline 50,000 \text { shares issued } & 452,500 \
\hline\
\hline \text { Total contributed capital } & 802,500 \
\hline \text { Retained earnings } & 204,500 \
\hline \text { Total shareholders' equity } & \$ 1,007,000 \
\hline
\end{array}$$
-The sale of a corporation's repurchased shares:

Quizplus · Accepted Answer

The sale of a corporation's repurchased shares will increase total shareholders' equity as it represents a reduction in the number of outstanding shares and an increase in the ownership percentage of the remaining shareholders. This will increase the value of each share and therefore, the overall equity of the company. It will not affect liabilities or assets.

Table 14-3 Following Is the Shareholders' Equity Section of the Balance

Table 14-3
Following Is the Shareholders' Equity Section of the Balance