What is the balance of this treasury stock account after these transactions?
If I repurchased 2,000 shares of my own stock for $ 40 per share. And the stock has a par of $ 10 per share. A month later I resold 1,200 of the treasury stock for $ 48 per share. What is the balance of the treasury stock account after these transactions?
And how do I fiqure this out please?
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Answer by Larry
You'll be holding 800 shares (the 2,000 you repurchased less the 1,200 you later resold). Your cost basis is 2,000 x $ 40 = $ 80,000. You sold 1,200 x $ 48 = $ 57,600. This means that the 800 shares you're still holding cost you $ 28/share ($ 22,400 / 800).
All common stock shares have the same par value regardless of the date they were purchased. The company sets the par value at the issuance of the stock, usually at a nominal value.
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