Ask Question
27 November, 01:02

A corporation purchases 35000 shares of its own $20 par common stock for $30 per share, recording it at cost. What will be the effect on total stockholders' equity? Decrease by $700000. Decrease by $1050000. Decrease by $350000. Increase by $1050000.

+2
Answers (1)
  1. 27 November, 04:49
    0
    Decrease by $1,050,000

    Explanation:

    Data provided as per the question

    Purchase shares = 35,000

    Common stock per share = $30

    The computation of total stockholders' equity is shown below:-

    Treasury stock = Purchase shares * Common stock per share

    = 35,000 * $30

    = $1,050,000

    Shareholder's Equity will be reduced by $1,050,000. So, for calculating the shareholder equity we simply applied the above formula.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A corporation purchases 35000 shares of its own $20 par common stock for $30 per share, recording it at cost. What will be the effect on ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers