Question

A corporation reacquires 60000 shares of its own $10 par common stock for 3000000 recording it...

A corporation reacquires 60000 shares of its own $10 par common stock for 3000000 recording it at cost
A) what is the effect on the corporations revenue of the period
B) what is the effect on stockholders equity

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Answer #1

A) what is the effect on the corporations revenue of the period

Answer:

Reacquires 60,000 shares will not affect on the corporations revenue of the period.

Explanation:

It not affect on the corporations revenue of the period Because this transaction affect only share holder's Equity and cash account

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B) what is the effect on stockholders equity

Answer:

Due to reacquisition the stockholders’ equity is effected with a reduction of $ 300000

Explanation:

Reacquisition of the equity share will reduced its the stockholders’ equity

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