QUESTION

A company issues 10,000 shares of $10 par value common stock for $22 in cash per share. Later, the company buys back 1,000 shares of this stock for the same $22 per share and records it using the par value method. Subsequently, the company sells 100 shares of this treasury stock for $23 per share. What should the company report as additional paid-in capital in the stockholders' equity section of its balance sheet?

A $108,100

B $121,300

C $109,300

D $120,000

QUESTION

A company issues 10,000 shares of its own $10 par value common stock to the public for $19 per share. Later, 1,000 of these shares are bought for $21 per share as treasury stock. Which of the following statements is true?

A The par value method and the cost method have the same total impact on stockholders equity

B The cost of the treasury stock is reported by the company as an asset on its balance sheet

C Because this is a stock transaction, retained earnings cannot be affected by a re-issuance of these shares

D Losses on the resale of these shares would impact reported net income for the year although gains would not