On October 15,Manx Company Bought 400 Shares of Its Own

question 168

Essay

On October 15,Manx Company bought 400 shares of its own stock for $16 per share.On December 10,Manx Company sold all of the same shares on the market for $20 per share.
Show how both of these transactions affect the accounting equation.Include both account titles and amounts.

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Definitions:

Long-Lived Assets

Assets with a useful life longer than one year, such as buildings, machinery, and equipment, used in the operation of a business.

Held for Sale

Assets or business segments classified as being available for immediate sale and expected to be sold within one year.

Normal Balance

The typical or expected balance of an account in double-entry bookkeeping, which is either debit for assets and expenses or credit for liabilities, equity, and revenue.

Accumulated Depreciation

The total amount of depreciation that has been charged on an asset since it was acquired, representing its decrease in value.