Melcher, Inc., originally sold 100,000 shares of its $10 par value common stock
ID: 2360276 • Letter: M
Question
Melcher, Inc., originally sold 100,000 shares of its $10 par value common stock at $25 per share. Several years later the company repurchased 10,000 of these shares at $55 per share. Melcher currently holds those shares in treasury.
Prepare the company's stockholders' equity section of the balance sheet to reflect this information. (Input all amounts as positive values. Omit the "$" sign in your response.)
Melcher, Inc., originally sold 100,000 shares of its $10 par value common stock at $25 per share. Several years later the company repurchased 10,000 of these shares at $55 per share. Melcher currently holds those shares in treasury.
Explanation / Answer
The above is not all correct.
Common Stock: 100,000 shares * $10 = $1,000,000
Additional paid-in capital: ($25 - $10)*10,000 shares = $1,500,000
Total: $1,000,000 + $1,500,000 = $2,500,000
Less Treasury Stock: 10,000 shares * $55 = $550,000
Total stockholders' equity: $2,500,000 - $550,000 = $1,950,000