Anthem Inc

question 242

Multiple Choice

Anthem Inc.issues 200,000 shares of stock with a par value of $0.01 for $150 per share.Three years later,it repurchases these shares for $80 per share.Anthem records the repurchase in which of the following ways?

• A) Debit Common Stock for $2,000, debit Additional Paid-in Capital for $29,998,000 and credit Cash for $30 million.
• B) Debit Treasury Stock for $16 million and credit Cash for $16 million.
• C) Debit Common Stock for $2,000, debit Additional Paid-in Capital for $15,998,000 and credit Cash for $16 million.
• D) Debit Stockholders' Equity for $30 million, credit Additional Paid-in Capital for $16 million and credit Cash for $16 million.

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Definitions:

Production Process

The production process involves the steps, operations, and methods used to transform raw materials into finished products, encompassing both manufacturing and service delivery.

Organisation Level Activity

Activities performed at the organizational level that benefit the entire company, not just specific departments or products.

Quality Problem

Issues or defects in a product or service that fail to meet specified quality standards, potentially leading to customer dissatisfaction.

Additional Cost

Expenses that are not initially planned or expected but arise during the course of a project or business operation.