question archive Sanja Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock
Sanja Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions): Common stock
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Sanja Marketing Corporation reported the following stockholders’ equity at December 31 (adapted and in millions):
Common stock.................................. $ 365
Additional paid-in capital.................. 286
Retained earnings.............................. 3,190
Treasury stock................................... (690)
Total stockholders’ equity................. $3,151
During the next year, Sanja Marketing purchased treasury stock at a cost of $34 million and resold treasury stock for $15 million (this treasury stock had cost Sanja Marketing $6 million). Record the purchase and resale of Sanja Marketing’s treasury stock. Overall, how much did stockholders’ equity increase or decrease as a result of the two treasury-stock transactions?
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Journal |
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DATE |
ACCOUNT TITLES AND EXPLANATION |
DEBIT |
CREDIT |
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Millions |
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Treasury Stock................................................................. |
34 |
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Cash......................................................................... |
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34 |
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Cash ........................................................................... |
15 |
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Treasury Stock......................................................... |
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6 |
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Paid-in Capital from Treasury Stock |
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Transactions....................................................... |
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9 |
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Overall, stockholders' equity decreased by $19 million ($34 million paid out minus $15 million received).
