Coy, Inc Initially Issued 200,000 Shares of $1 Par Value Stock

question 102

Multiple Choice

Coy, Inc. initially issued 200,000 shares of $1 par value stock for $1,000,000 in 2007. In 2008, the company repurchased 20,000 shares for $200,000. In 2009, 10,000 of the repurchased shares were resold for $160,000. In its balance sheet dated December 31, 2009, Coy, Inc.'s treasury stock account shows a balance of:

• A)$ 0.
• B)$ 40,000.
• C)$100,000.
• D)$200,000.A treasury stock account is created when a company reacquires its own stock as treasury stock.The full purchase price (cost) is debited to Treasury Stock.When treasury stock is sold, the Treasury Stock account is credited for the cost per share, with an additional credit to Paid-in Capital, Treasury Stock (or Paid-in Capital Repurchased Shares), if the sale price exceeds the reacquisition price.The 2008 repurchase is accounted for with a debit to Treasury Stock for $200,000.When half of the treasury stock is resold, $100,000 is credited to Treasury Stock and $60,000 is credited to Paid-In Capital, Treasury Stock.The balance in the Treasury Stock account is ($200,000 $100,000 =) $100,000.

---

Definitions:

Drivers

Factors or forces that influence the direction and intensity of trends or actions in a specific context.

Collaborations

The action of working with someone to produce or create something, often seen in professional, scientific, and creative fields.

Principal to Principal Theory

A theory in corporate governance that emphasizes the relationship and agreements between the major stakeholders or the top decision-makers in an organization.

Cross-Sector Collaborations

partnerships that bridge different parts of the economy, such as public, private, and non-profit organizations, to address complex societal issues.