A Corporation Purchases 30,000 Shares of Its Own $15 Par

question 62

Multiple Choice

A corporation purchases 30,000 shares of its own $15 par common stock for $30 per share, recording it at cost. What will be the effect on total stockholders' equity?

• A) Increase by $450,000
• B) Decrease by $900,000
• C) Increase by $900,000
• D) Decrease by $450,000

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Definitions:

Third Party

An individual or group besides the two primarily involved in a transaction or legal situation, often providing additional services or involvement.

Agent

A person or entity authorized to act on behalf of another person or entity, known as the principal, in business transactions or legal matters.

Agreement

One of the four elements necessary for a contract; consists of an offer made by one party, the offeror, and the acceptance of the offer by another party, the offeree.

Principal

A principal can refer to the main party in a transaction or agreement, often used to denote the primary source of obligation or responsibility.