Use the following information to answer the question below. On January 1,2010,Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $17 per share.On February 1,2010,Falcon purchased 6,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,2010.
What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31,2010?

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Quizplus · Accepted Answer

Gains from treasury stock transactions are not reported on the income statement. Instead, they are recorded in additional paid-in capital or retained earnings.

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