The Stockholders' Equity Section of Sea Scape, Inc

question 163

Essay

The Stockholders' Equity section of Sea Scape, Inc.'s balance sheet on January 1, 2015, appeared as follows:
A On March 1, 2015, Sea Scape resold 800 shares of treasury stock at $25 per share.
What is the effect of the March 1 transaction on the accounting equation?
B Why is the excess of the sales price of the 800 shares of treasury stock over the cost
not reported on the income statement?

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