Casey's Computers purchased 4,000 shares of its own $10 par value common stock for $92,000. As a result of this transaction:
A) Casey's Paid-in Capital in Excess of Par Value account decreased $52,000.
B) Casey's Common Stock decreased $40,000.
C) Casey's Stockholders' Equity decreased $92,000.
D) Casey's Stockholders' equity increased $52,000.

Question

Quizplus · Accepted Answer

When a company repurchases its own stock, it reduces stockholders' equity by the cost of the repurchase, which in this case is $92,000.

Casey's Computers Purchased 4,000 Shares of Its Own $10 Par