Stock Split/ Treasury Stock

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $160. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately ________.

$7
$112
$40
$640

On January 1, 20xx, Sunshine Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Sunshine purchased 2,000 shares of treasury stock for $23 per share and later sold the treasury shares for $21 per share on March 1, 20xx.
The journal entry to record the purchase of the treasury shares on February 1, 20xx, would include a ________.

credit to Treasury Stock for $46,000
debit to Treasury Stock for $46,000
debit to a loss account for $6,000
credit to a gain account for $6,000

Solution Summary

The solution explains two questions relating to market value of share after a stock split and journal entry to record treasury stock transaction.