Question

On January 2, 2018, the first year of operations, Brunswick Corp., issued 15,000 shares of $10 par value common stock for $15 per share. On July 1, 2018, Alpha Corp., 2,000 of these shares were reacquired for $20 each. On September 1, 2018 Brunswick Corp. reissued 800 shares of its treasury stock for $22 per share. No other stock transactions occurred during the rest of fiscal year 2018. Use this information to determine the dollar amount that Alpha will report on its fiscal year 2018 Balance Sheet for Paid in Capital Treasury Stock.

Answer 1

Answer:

Paid in capital treasury stock = $1,600

Explanation:

Paid in capital treasury stock = (Market value - purchase value) × Number of share reissued.

Given,

Reacquired treasury stock = 2000 shares

As the shares were reacquired for $20,

Reacquired total treasury stock = 2,000 shares × $20 = $40,000

Reissued number of shares = 800

Market price of those treasury stock is $22 per share.

Therefore, paid in capital - treasury stock = $(22 - 20) × 800 shares

Paid in capital - treasury stock = $1,600