Question

During the current year, Onal Co. purchased 10,000 shares of its own stock at $7 per share. The stock was originally issued at $6. The firm sold 5,000 of the treasury shares for $10 per share. The firm uses the cost method to account for treasury stock. What amount should Onal report in its income statement for these transactions?

Answer 1

What amount should Onal report in its income statement for these transactions? 0.

Step-by-step explanation:

deb cre

year-1 Treasury Stock 70000

(10000*7)

Cash 70000

year-1 Cash 50000

(5000*10)

Treasury Stock 35000

(5000*7)

Paid in capital for treasury stock 15000