Question

Refurbish, Inc. bought 1,000 shares of its own stock at $8 a share. Later, it reissued the shares for $10,000. The effect of the entry to record the sale of treasury stock on the accounting equation includes a(n) ______.

Answer 1

$10,000 increase in stockholder equity

Step-by-step explanation:

The buying of treasury stock reduces the balance of stockholder equity but when the treasury stock is reissued or we can say after purchase, the sale of treasury stock is done for $10,000. So, it increases the balance of stockholder equity

It means that the purchase of treasury stock has an adverse impact on stockholder equity whereas reissued shares have a positive impact on stockholder equity