Vernon Company reissued 200 shares of its treasury stock. The stock originally cost $25 per share and was reissued for $35 per share. Select the answer that accurately reflects how the reissue of the treasury stock would affect Vernon's financial statements.

Question

Quizplus · Accepted Answer

Assets (cash) increase by $7,000 (200 x $35), treasury stock decreases by $5,000 (200 x $25) and paid-in capital in excess of cost - treasury stock increases by $2,000. The cash inflow is reported as a financing activity.

Vernon Company Reissued 200 Shares of Its Treasury Stock