Use the Following Information to Answer the Question Below

question 23

Multiple Choice

Use the following information to answer the question below. On January 1,2013,Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding.All 40,000 shares had been issued in a prior period at $17 per share.On February 1,2013,Falcon purchased 6,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,2013.
What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31,2013?

• A) $0
• B) $42,700
• C) $6,100
• D) $4,270

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Definitions:

Promissory Note

A financial instrument in which one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.

Prepaid Expense

Payments made beforehand for products or services that will be provided later on.

Prepaid Expense

Expenses paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet until consumed.

Accrued Liabilities

Expenses that have been incurred but not yet paid or recorded in the company's ledger, representing future outflows of cash.