Did the company benefit from the treasury stock transaction?

The Stockholders’ Equity category of Bradford Company’s balance sheet on January 1, 2017, appeared as follows: Common stock, $10 par, 10,000 shares issued and outstanding …………………$100,000 Additional paid-in capital ……………………………………………………………50,000 Retained earnings ……………………………………………………………………80,000 Total stockholders’ equity …………………………………………………………$230,000 The following transactions occurred during 2017: a. Reacquired 2,000 shares of common stock at $20 per share on July 1. b. Reacquired 400 shares of common stock at $18 per share on August 1. Required 1. Identify and analyze the effect of each transaction. 2. Assume that the company resold the shares of treasury stock at $28 per share on October 1. Did the company benefit from the treasury stock transaction? If so, where is the ”gain” presented on the balance sheet? View Solution:
The Stockholders Equity category of Bradford Company s balance sheet on

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