Question

Prior to May 1, Fortune Company has never had any treasury stock transactions. A company repurchased 200 shares of its common stock on May 1 for $10,000. On July 1, it reissued 100 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-in Capital, Treasury Stock account on August 2?

Answer 1

$100

Step-by-step explanation:

The computation of the balance in the paid - in capital for treasury stock account on August 2 is shown below:

On May 1 $0

July 1 : $2/share × 100 shares $200

Less:

Aug 1 : $1 share × 100 shares ($100)

Balance as on August 2 $100

We simply deduct the august 1 amount from the July 1 amount so that the balance as on August 2 for the paid - in the capital for treasury stock could come