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The following information applies to the questions displayed below.] On April 10, 2019, Amelia Inc. purchased...

The following information applies to the questions displayed below.]

On April 10, 2019, Amelia Inc. purchased 525 shares of its own common stock in the market for $27 per share. On September 28, 2019, the company sold 315 of these shares in the open market at a price of $28 per share.

1. Use the horizontal model to show the effects on Amelia Inc.’s financial statements of the sale of the treasury stock on September 28, 2019. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

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Answer #1

Treasury stock is the stock repurchased by the issuing company intending to reduce the stockholder equity or intending to sale on higher price. The the buying of treasury stock will reduce the stockholders equity and selling the treasury stock will increase the stockholder equity. Selling of stock cash will increase and therefore,total assets will increase.

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