Question

Bonita Industries had 80000 shares of treasury stock ($10 par value) at December 31, 2020, which it acquired at $11 per share. On June 4, 2021, Bonita issued 40000 treasury shares to employees who exercised options under Bonita's employee stock option plan. The market value per share was $13 at December 31, 2020, $15 at June 4, 2021, and $18 at December 31, 2021. The stock options had been granted for $12 per share. The cost method is used. What is the balance of the treasury stock on Bonita's balance sheet at December 31, 2021

Answer 1

$440,000

Step-by-step explanation:

Calculation to determine the balance of the treasury stock on Bonita's balance sheet at December 31, 2021 using The cost method

Using this formula

Treasury stock= Share of treasury stock acquired*Treasury shares

Let plug in the formula

Treasury stock= $11 per share* 40000

Treasury stock= $440,000

Therefore the balance of the treasury stock on Bonita's balance sheet at December 31, 2021 is $440,000