A corporation has both Preferred and Common Stock outstanding. Common Stock has

Question

A corporation has both Preferred and Common Stock outstanding. Common Stock has been repurchased. Some of the repurchased Common Stock has been resold above the repurchase price. Total Stockholders’ Equity = a. Preferred Stock authorized + Common Stock authorized + Paid in Capital in excess of par + Paid in Capital from sale of Treasury Stock + Retained Earnings - Treasury Stock b. Preferred Stock issued + Common Stock issued + Paid in Capital in excess of par + Retained Earnings - Treasury Stock - Paid in Capital from sale of Treasury Stock c. Preferred Stock issued + Common Stock issued + Paid in Capital in excess of par + Treasury Stock + Paid in Capital from sale of Treasury Stock + Retained Earnings d. Preferred Stock issued + Common Stock issued + Paid in Capital in excess of par + Paid in Capital from sale of Treasury Stock + Retained Earnings - Treasury Stock

Explanation / Answer

Answer is d. Preferred Stock issued+ Common Stock issued+Paid in capital in excess of par+Paid in capital from sale of Treasury stock+Retained earnings-Treasury Stock.

Explanation:

The Issued capital is added in Equity not the aauthorized capital.

The gain on sale of Treasury Stock is added in Equity.

The Treasury Stock purchased (net) at cost shall be deducted from Equity.

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