Question

In previous years, Cox Transport reacquired 2 million treasury shares at $20 per share and, later, 1 million treasury shares at $26 per share. If Cox now sells 1 million treasury shares at $29 per share and determines cost as the weighted-average cost of treasury shares, by what amount will Cox’s paid-in capital—share repurchase increase? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).)

Answer 1

Answer:

The solution to the given problem is provided below.

Explanation:

Cash (1 million shares x 29)                                                    29 mil  

Paid- in capital – share repurchase (difference )                            7  mil

Treasury stock (1 million shares x 22 )                                           22  mil