ter 18 Help Save & Exit Subm Check my work Horton Industries\' shareholders\' eq

Question

ter 18 Help Save & Exit Subm Check my work Horton Industries' shareholders' equity included 160 million shares of $1 par common stock and a balance in paid-in capital-excess of par of $1,600 million. Assuming that Horton retires shares it reacquires (restores their status to that of authorized but unissued shares), by what amount will Horton's total paid-in capital decline if it reacquires 3 million shares at $9.00 per share? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).1 ts will de Emillion Print

Explanation / Answer

Answer: The paid in capital will decline by [3 million shares * $9 per share] = $27 million.

Explanation:

On retirement of the shares, the $9 million paid will go to the debit of common stock (par value) to the extent of $3 million and the balance of $24 million will be to the debit of paid in capital in excess of par, thereby reducing the paid in capital by $27 million.

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