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

---

Definitions:

Labor

The work performed by individuals that contributes to the production of goods and services in an economy.

Variable Costs

Expenses that vary in direct proportion to the level of production or sales volume, such as materials and labor.

Quantity Produced

Indicates the total amount of goods or services produced by a company during a specific period.

Cross-Price Elasticity

A measure of the responsiveness in the quantity demanded of one good due to a price change in another good.