Early in 2005 , Tin Corporation was formed with authorization to issue 50,000 shares of \(\$ 3\) par value common stock. All shares were issued at a price of \(\$ 10\) per share. The corporation reported net income of \(\$ 150,000\) in \(2005, \$ 80,000\) in 2006 , and \(\$ 100,000\) in 2007 . No dividends were declared in any of these three years.
In 2006 , the company purchased its own shares for \(\$ 30,000\) in the open market. In 2007, it reissued all of its treasury stock for \(\$ 40,000\).

Instructions

a. Prepare the stockholders' equity section of the balance sheet at December 31, 2007. Include a supporting schedule showing your computation of retained earnings at the balance sheet date. (Income increases retained earnings.)

b. As of December 31, compute the company's book value per share of common stock

c. Explain how the treasury stock transactions in 2006 and 2007 were reported in the company's statement of cash flows.