Kellogg,Inc.purchased 200 shares of its own $20 par value stock for $30 cash per share.Which of the following answers reflects how this purchase of treasury stock would affect the elements of Kellogg's financial statements?

Question

Quizplus · Accepted Answer

Assets (cash)decrease and stockholders' equity decreases (by increasing treasury stock,a contra equity account)by $6,000 (or 200 shares × Cost of $30 per share).The cash outflow is reported in the financing activities section of the statement of cash flows.