Edge Company has 500,000 shares of no par common stock with a stated value of $8

Question

Edge Company has 500,000 shares of no par common stock with a stated value of $8 per share issued and outstanding as of January 1, 2015, originally issued for $14 per share. During 2015, Edge Company had the following transactions involving its own stock:
On March 6, acquired 12,000 shares of treasury stock at a cost of $12 per share
On April 18, resold 4,000 shares of treasury stock at $15 per share.
On June 11, resold an additional 2,000 shares of treasury stock at $18 per share

If Edge uses the cost method of accounting for treasury stock, what will be the balance in additional paid in capital from treasury stock as a result of these transactions?

a. $24,000
b. $12,000
c. $0
d. $72,000

Explanation / Answer

Balance in additional paid in capital from treasury stock = 4000*(15-12)+2000*(18-12)= 24000 Option A is correct

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