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The Following Information Was Drawn from the Year-End Balance Sheets

Question 66

Multiple Choice

The following information was drawn from the year-end balance sheets of White,Inc.  Year 2 Year 1 Bonds payable $200,000$275,000 Common stock 112,50087,500 Treasury stock 17,50012,500 Retained earnings 35,00027,500\begin{array} { l r r } & \text { Year } 2 & \text { Year } 1 \\ \text { Bonds payable }& \$ 200,000 & \$275,000 \\\text { Common stock } & 112,500 & 87,500 \\\text { Treasury stock } & 17,500 & 12,500 \\\text { Retained earnings }& 35,000 & 27,500\end{array}
White,Inc.,uses the cost method to account for treasury stock.No treasury stock was sold during the year.What is the amount of cash outflows for the purchase of treasury stock?


A) $7,500
B) $17,500
C) $25,000
D) None of these answers are correct.

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