Casey's Computers Purchased 4,000 Shares of Its Own $10 Par

question 87

Multiple Choice

Casey's Computers purchased 4,000 shares of its own $10 par value common stock for $92,000. As a result of this transaction:

• A) Casey's Paid-in Capital in Excess of Par Value account decreased $52,000.
• B) Casey's Common Stock decreased $40,000.
• C) Casey's Stockholders' Equity decreased $92,000.
• D) Casey's Stockholders' equity increased $52,000.

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Definitions:

Legally Enforceable

Pertains to an agreement or contract that is recognized by law and can be upheld or imposed by a court.

Legal Detriment

In contract law, doing (or promising to do) something that one has a legal right not to do, giving up (or promising to give up) something that one has a legal right to keep, or refraining from doing (or promising not to do) something that one has a legal right to do.

Hamer v. Sidway

A landmark 1891 New York Court of Appeals case that established the principle of forbearance (refraining from an action) as valuable consideration in contract law.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another party if the latter has relied on that promise to their detriment.