Question

Worthy Ships initially issued 320,000 shares of $1 par stock for $1,600,000 in 2021. In 2023, the company repurchased 32,000 shares for $320,000. In 2024, 16,000 of the repurchased shares were resold for $256,000. In its balance sheet dated December 31, 2024, C. Worthy's treasury stock account shows a balance of: Multiple Choice $0 $320,000 $64,000 $160,000

Answer 1

$160,000

Step-by-step explanation:

The calculation of the treasury stock is seen below

Treasury stock account balance on December 31, 2024 balance sheet

= Number of shares in treasury stock × Cost per share

= (32,000 - 16,000) × ($320,000 ÷ 32,000)

= 16,000 × $10

= $160,000

Therefore, for computing the treasury account stock balance, we simply make use of the above.