Ladder Distributors The Stockholders' Equity Section of the December 31, 2019, Balance

question 93

Short Answer

Ladder Distributors
The stockholders' equity section of the December 31, 2019, balance sheet is provided below:
Assume that all of the 20,000 shares of stock that was issued as of December 31, 2019, was issued for $42 per share. On March 1, 2020, the company reacquired 4,000 shares of its common stock for $50 per share.
-Refer to Ladder Distributors. Suppose the company reissued 1,000 shares of its treasury stock on June 1, 2020, for $39 each. Which of the following is true regarding the entry required to record this transaction?
a.A debit to treasury stock is required for $50,000.
b.A credit to treasury stock is required for $39,000.
c.A debit to retained earnings is required for $11,000.
d.A debit to paid-in capital from treasury stock transactions is required for $3,000.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the ownership interest of the stockholders.

Income Statement

A financial statement that shows a company’s revenue and expenses over a specific period, determining its profit or loss.

Expense Accounts

Accounts used in accounting to track the consumption of economic resources or the incurrence of liabilities in the operation of a company.

Credits

Entries made on the right-hand side of an account, representing gains or increases in liabilities, income, or equity.