A Corporation Purchases 20,000 Shares of Its Own $20 Par

question 206

Multiple Choice

A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost.What will be the effect on total stockholders' equity?

• A)Increase by $700,000.
• B)Decrease by $400,000.
• C)Decrease by $700,000.
• D)Decrease by $300,000.

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Definitions:

Compensation Strategy

An organization's plan for determining employee pay and benefits to align with business objectives.

Paid

Refers to receiving money as compensation for work or services performed.

Labour Market

The labour market refers to the supply of labor available to meet the demand for workers by employers.

International Market

The vast expanse of global trade and commerce, where businesses from different countries buy, sell, and exchange goods and services.