Anthem Inc

question 187

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 $14 million and credit Cash for $16 million.

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Definitions:

Tangible Personal Property

Physical items owned by an individual or business that can be seen, touched, and moved, excluding real estate.

Exception

A provision in tax law or regulation that allows individuals or entities to be exempt from the usual application of a rule under specified conditions.

Student Loan Interest

The cost of borrowing money for education, which can be claimed as a deduction to reduce taxable income, subject to certain limits.

Full-time

Typically refers to employment or student status that meets a minimum number of hours defined by an employer or educational institution.