During the current year, Onal Co. purchased 10,000 shares of its own stock at $7 per share. The stock was originally issued at $6. The firm sold 5,000 of the treasury shares for $10 per share. The firm uses the cost method to account for treasury stock. What amount should Onal report in its income statement for these transactions?

Question

Business

Nancy Cooley

20 January, 21:54

During the current year, Onal Co. purchased 10,000 shares of its own stock at $7 per share. The stock was originally issued at $6. The firm sold 5,000 of the treasury shares for $10 per share. The firm uses the cost method to account for treasury stock. What amount should Onal report in its income statement for these transactions?

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Lillianna Dominguez · Answer 1

What amount should Onal report in its income statement for these transactions? 0.

Explanation:

deb cre

year-1 Treasury Stock 70000

(10000*7)

Cash 70000

year-1 Cash 50000

(5000*10)

Treasury Stock 35000

(5000*7)

Paid in capital for treasury stock 15000