Question

Which answer would represent the financial statement presentation of the stockholders' equity section on the balance sheet after the following transactions?

1) Issued 200 shares of $20 par value common stock for $50 a share. Five hundred shares are authorized.
2) Purchased 75 shares of treasury stock at $44 a share.

Answer 1

When 200 shares our issued and sold for $50 a share the stock holders equity increases by $10,000(50*200). Because now stock holders own an extra 10,000 worth the stocks , so their equity increases by 10,000.

When 75 shares are repurchased at $44 a share the stock holders equity decreases by 3,300 (75*44). Because Now stock holders own 3,300 worth of shares less, so their equity decreases by 3,300

Step-by-step explanation: