Please Refer to the Following Information for Peartree Company

question 30

Multiple Choice

Please refer to the following information for Peartree Company: If Peartree purchases an additional 1,000 shares of treasury stock at $18 per share, which of the following statements would be TRUE?

• A)The Treasury stock account would go down by $18,000.
• B)The Paid-in capital account would not be affected.
• C)The Retained earnings account would go down by $2,000.
• D)The Paid-in capital account would go down by $2,000.

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Definitions:

Incomes

Funds earned, frequently in a regular pattern, whether from occupational activities or investments.

Demand

The quantity of a good or service that consumers are willing and able to purchase at different prices during a specific time period.

Perfectly Inelastic

Describes a situation where the quantity demanded or supplied does not change in response to a change in price.

Price Elasticity

A tool for measuring how changes in price impact the demand for a particular item.