A Firm Owns 1,000 Treasury Shares Which It Acquired for $15

question 28

Multiple Choice

A firm owns 1,000 treasury shares which it acquired for $15 per share (par value $1) .The firm sells 500 of the treasury shares for $20 per share.Using the cost method, what is the entry to record the sale of the treasury stock using the cost method?

• A)Cash 10,000
• Common Stock-Treasury Shares 10,000
• B)Cash 10,000
• Common Stock-Treasury Shares 7,500
• Add'l Paid-in Capital-Treasury Stock 2,500
• C)Cash 10,000 Common Stock-Treasury Shares 500
• Add'l Paid-in Capital-Treasury Stock 9,500
• D)Cash 10,000
• Common Stock-Par 1,000
• Common Stock-Treasury Shares 11,000
• E)Common Stock-Treasury Shares 11,000
• Cash 10,000
• Common Stock-Par 1,000

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