Refer to the following information for Tangent Corporation: times • Common Stock

Question

Refer to the following information for Tangent Corporation: times • Common Stock, $ 1 $1.00 par, 101 comma 000 101,000 shares issued, 100 comma 000 100,000 shares outstanding times • Paid minus In Capital in Excess of Par long dash —Common: $ 2 comma 170 comma 000 $2,170,000 times • Retained Earnings: $ 970 comma 000 $970,000 times • Treasury Stock: 9 comma 000 9,000 shares purchased at $ 33 $33 per share If Tangent resold 1 comma 800 1,800 shares of treasury stock for $ 18.00 $18.00 per share, which of the following statements would be true?

The Treasury Stock account would decrease by

$ 59 comma 400$59,400.

B.

The

PaidminusIn

Capital in Excess of

Parlong dash—Common

account would increase by

$ 1 comma 800$1,800.

C.

The Retained Earnings account would increase by

$ 32 comma 400$32,400.

D.

The Treasury Stock account would decrease by

$ 29 comma 700$29,700.

Explanation / Answer

SOLUTION

The correct Option is -

The Treasury Stock account would decrease by $59,400.

Treasury account will decreased by the number of shares sold at the rate at which it was original purchased.

Reduction = 1,800 shares * $33 = $59,400

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