Please Refer to the Following Information for Peartree Company

question 133

Multiple Choice

Please refer to the following information for Peartree Company:
• Common stock, $1.00 par, 100,000 issued, 95,000 outstanding
• Paid-in capital in excess of par: $2,150,000
• Retained earnings: $910,000
• Treasury stock: 5,000 shares purchased at $20 per share
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If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, which of the following statements would be TRUE?

• A) Total equity of the company would remain unchanged.
• B) Total equity of the company would go up by $18,000.
• C) Total equity of the company would go down by $18,000.
• D) Total equity of the company would go down by $2,000.

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Definitions:

Social Power

The ability of an individual or group to influence the behavior, beliefs, or attitudes of others within a social context.

Profit Maximization

The business objective of achieving the highest possible financial gain, commonly through increased sales revenue, cost reduction, or both.

Social Goals

Objectives that aim to improve society's well-being, addressing issues like poverty, inequality, and environmental sustainability.

Economic Institution

An established organization or system that plays a role in the distribution and consumption of goods and services within an economy.