200,000 shares, issued 100,000 shares
Additional paid-in capital
Minus: Treasury stock, at cost, 5,000 shares
The following events occurred during the year:
1,000 shares of treasury stock were sold for $10,000.
10,000 shares of previously unissued common stock sold for $12 per share.
The distribution of a 2-for-1 stock split resulted in the common stock’s per-share par value being halved.
Pugh accounts for treasury stock under the cost method. Laws in the state of Pugh’s incorporation protect shares held in treasury from dilution when stock dividends or stock splits are declared.
In Pugh’s December 31 statement of equity, the par value of the issued common stock should be
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