The following information has been taken from the ledger accounts of Sampras Corporation. Total income since incorporation
Question:
Total income since incorporation ...........$287,000
Total cash dividends paid ...............60,000
Total value of stock dividends distributed ........40,000
Gains on treasury stock transactions ...........18,000
Unamortized discount on bonds payable ..........32,000
Instructions
Determine the current balance of retained earnings.
Step by Step Answer:
Total income since incorporation 287000 Less Total cash dividends pa...View the full answer
Related Video
Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.
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