Question

Jiang Company initially issued 300,000 shares of $1 par stock for $1,500,000 in 2016. In 2019, the company repurchased 30,000 shares for $300,000. In 2020, 15,000 of the repurchased shares were resold for $240,000. In its balance sheet dated December 31, 2020, the company's treasury stock account shows a balance of:

Answer 1

$150,000

Step-by-step explanation:

Calculation to determine the company's treasury stock account balance

Based on the information given The 2020 repurchase will be debited to treasury stock for the amount of $300,000 and in a situation were half of the treasury stock is been resold the amount of $150,000 Calculated as ($300,000/2) will be credited to treasury stock

Using this formula

Treasury stock account balance=2020 Repurchase stock - Half of treasury stock resold)

Let plug in the formula

Treasury stock account balance=$300,000-($300,000/2)

Treasury stock account balance=$300,000+$150,000

Treasury stock account balance=$150,000

Therefore In its balance sheet dated December 31, 2020, the company's treasury stock account shows a balance of $150,000