treasury stock

treasury stock

Write a response to the following scenario:

Chen, Inc. purchases 1,000 shares of its own previously issued $5 per common stock for $12,000. Assuming the shares are held in the treasury, what effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders’ equity?

The treasury stock purchased in the above question was resold by Chen, Inc. for $15,000. What effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders’ equity?

Format your response consistent with APA guidelines.

……………….Answer preview……………….

Treasury stock is repurchased shares. For this reason, there is no effect on the net income. When recording treasury stock, a contra –equity account is created through a debit…………………

APA

242 words