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Stockholders Equity

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A. Suppose that the company issues 10,000 shares at $4 a share. Which of the figures below would change?

b. What would happen to the company's books if instead it bought back 1,000 shares at $4 per share?

Common stock ($1 par value) $60,000
Additional paid-in capital 10,000
Retained earnings 30,000 = 100,000 Common equity

Common Equity 100,000
Treasury Stock (2,000 shares) 5,000 = 95,000 Net Common equity

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Solution Summary

The solution explains the impact on stockholders equity of the given transactions.

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a. Suppose that the company issues 10,000 shares at $4 a share. Which of the figures below would change?

In this case the common stock will ...

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