Stocks And Transactions

Topics: Stock, Stock market, Generally Accepted Accounting Principles Pages: 2 (133 words) Published: January 10, 2015


Stocks and Transactions
Alicia Camacho Vazquez
XACC/291
January 11, 2015
Paula Hill
Stocks and Transactions
Chen, Inc. purchases 1,000 shares of its own previously issued $5 per common stock for $12,000. Assuming the shares are held in the treasury, what effect does this transaction have on (a) Net income? There would be no change. (b) Total assets? There would be a $12,000.00 decrease.

(c) Total paid-in capital? There would be no change.
(d) Total stockholders' equity? This would have a $12,000.00 decrease.  
The treasury stock purchased in the above question was resold by Chen, Inc. for $15,000. What effect does this transaction have on:
(a) Net income? There would be no change.
(b) Total assets? There would be an increase of $15,000.00. (c) Total paid-in capital? There would be an increase of $3,000.00. (d) Total stockholders' equity? There would be an increase of $15,000.00.
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