Question

On December 1, 20X4, Line Corp. received a donation of 2,000 shares of its $5 par value common stock from a stockholder. On that date, the stock's market value was $35 per share. The stock was originally issued for $25 per share. By what amount would this donation cause total stockholders' equity to decrease

Answer 1

Answer:

$0

Explanation:

The shares that are donated is treated as the treasury shares. The treasury stock and the gain or the revneue account rise the stock market value. If there is an increase in the treasury stock so it reduced the stockholder equity but on the other hand the gain or revenue increase the owner equity

So overall there is no net effect

hence, the amount should be $0