Prior to June 30,a company has never had any treasury stock transactions.A company repurchased 100 shares of its common stock on June 30 for $40 per share.On July 20,it reissued 50 of these shares at $46 per share.On August 1,it reissued 20 of the shares at $38 per share.What is the balance in the Treasury Stock account on August 2?
A)$5,050.
B)$2,600.
C)$100.
D)$1,200.
E)$0.

Question

Quizplus · Accepted Answer

The company initially purchased 100 shares at $40 each, totaling $4,000. It reissued 50 shares at $46, reducing the treasury stock by $2,000 (50 shares x $40). Then, it reissued 20 shares at $38, reducing the treasury stock by $800 (20 shares x $40). The remaining balance in the Treasury Stock account is $1,200 ($4,000 - $2,000 - $800).

Prior to June 30,a Company Has Never Had Any Treasury