Question

On March 1st, Nichols Corporation purchased 1,000 shares of previously issued common stock, paying $3 per share. On April 1st, Nichols sold 600 shares at $4 per share. What is the amount of Paid-In Capital from Treasury Stock Transactions for the sale of 600 shares?

Answer 1

Answer:

The Paid-In Capital from Treasury Stock Transactions for the sale of 600 shares is $600.

Step-by-step explanation:

Total number of shares = 1000.

Sales price is$600\times4=2400$ dollars

When treasury stocks are sold, cash is debited for the sales price.

And simultaneously, the treasury stock is credited for the purchase price of the stock = $600\times3=1800$ dollars

Paid-In Capital from Treasury Stock Transactions = $2400-1800=600$ dollars (difference between sale and purchase price)

So, the amount of Paid-In Capital from Treasury Stock Transactions for the sale of 600 shares is $600.