Question

A company had the following treasury-stock related account balances: Treasury Stock - $250,000Paid-in Capital from Treasury Stock Transactions - $25,000If the company resells Treasury Stock that originally cost $60,000 for $40,000, then __________.

Answer 1

the paid-in capital from treasury stock transactions would be reduced by $20000

Step-by-step explanation:

Treasury stock is the stock that is bought by the stakeholders of the issuing company.The treasury stock does not receive dividends. Paid in capital are money being paid by investors in exchange for shares.

If the company resells Treasury Stock that originally cost $60,000 for $40,000.

The paid-in capital from treasury stock transactions to be reduced = $60,000 - $40,000 = $20000