Elroy Corporation repurchased 3,400 shares of its own stock for $40 per share. The stock has a par of $15 per share. A month later, Elroy resold 850 shares of the treasury stock for $48 per share. question: What is the balance of the treasury stock account after these transactions?

Elroy Corporation repurchased 3,400 shares of its own stock for $40 per share. The stock has a par of $15 per share. A month later, Elroy resold 850 shares of the treasury stock for $48 per share. question: What is the balance of the treasury stock account after these transactions?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 6PA: EllaJane Corporation was organized several years ago and was authorized to issue 4,000,000 shares of...

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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

Elroy Corporation repurchased 3,400 shares of its own stock for $40 per share. The stock has a par of $15 per share. A month later, Elroy resold 850 shares of the treasury stock for $48 per share.

question: What is the balance of the treasury stock account after these transactions?

Definition Definition Stock repurchased from the stockholders by the company that once issued it. The repurchase of the stock reduces the stockholder's equity balance on the balance sheet. Treasury stocks are an important constituent of stockholder's equity but do not carry any voting rights.

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