Question

Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 150 shares of its common stock on May 1 for $7,500. On July 1, it reissued 75 of these shares at $53 per share. On August 1, it reissued the remaining treasury shares at $48 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?

Answer 1

$150

Step-by-step explanation:

The computation is shown below:

Repurchase rate per share

= $7,500 ÷ 150

= $50 per share

On july 1 paid in capital , treasury stock = $450 [150 × ($53 - $50)]

On August 1 paid in capital ,treasury stock = ($300) [150 × ($48 - $50)]

So on august 2 it would be

= $450 - $300

= $150