Treasury Stock

A company might purchase treasury stock for all of the following reasons except

• A.

  management wants to avoid a takeover by an outside party.

• B.

  the company needs the stock to distribute to employees as part of its employee stock purchase plans.

• C.

  management wants to decrease the earnings per share of common stock.

• D.

  it wants to increase its net assets by buying its stock low and reselling it at a higher price.

Seawall Corporation purchased 3,400 shares of its own $1.30 par value common stock for $165,000. As a result of this​ transaction, the​ company's stockholders' equity

• A.

  decreased by

  $165,000.

• B.

  increased by

  $165,000.

• C.

  increased by

  $4,420.

• D.

  increased by

  $160,580.

Guillaume Corporation issued 100,000 shares of $0.75 par value common stock. Later that​ year, Guillaume purchased 22,000 shares of its own common stock. Two months​ later, it reissued 1,800 shares. How many shares are issued and​ outstanding?

• A. 101,800 issued and 79,800 outstanding

• B. 100,000 issued and 79,800 outstanding

• C. 100,000 issued and 100,000 outstanding

• D. 122,000 issued and 120,200 outstanding

• A

• B

• C

• D

• A

• B

• C

• D