Sunland Company started business in 2012 by issuing 207000 shares of $18 par com

Question

Sunland Company started business in 2012 by issuing 207000 shares of $18 par common stock for $25 each. In 2017, 25600 of these shares were purchased for $37 per share by Sunland Company and held as treasury stock. On June 15, 2018, these 25600 shares were exchanged for a piece of property that had an assessed value of $757000. Sunland’s stock is actively traded and had a market price of $43 on June 15, 2018. The cost method is used to account for treasury stock. The amount of paid-in capital from treasury stock transactions resulting from the above events would be

Explanation / Answer

Amount of paid-in capital from treasury stock transactions =25600*(43-37)=$153600 Option 2 is correct

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