Ambiance Inc

question 87

Multiple Choice

Ambiance Inc.buys back 3,000 shares of its $10 par value common stock from investors at $45 per share.This stock repurchase would be recorded with a debit to:

• A) Cash and a credit to Treasury Stock for $135,000.
• B) Treasury Stock and a credit to Cash for $30,000.
• C) Treasury Stock and a credit to Cash for $135,000.
• D) Treasury Stock for $30,000, a debit to Additional Paid-in Capital for $105,000, and a credit to Cash for $135,000.

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Definitions:

Discount

A reduction from the full price or standard cost of a good or service, often used to stimulate sales or clear inventory.

Equivalent Variation

An economic concept measuring the change in income needed to reach an individual's utility level before a price change, holding prices constant.

Earrings

Jewelry pieces designed to be worn on the earlobes, often as a fashion accessory.

Income

An economic term that refers to the money received, usually on a regular basis, for work or through investments.