Use the following information to answer the question below. On January 1, 2010, Falcon Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $17 per share. On February 1, 2010, Falcon purchased 3,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2, 2010.
What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31, 2010 ?
A) $0
B) $21,700
C) $3,100
D) $2,170

Question

Quizplus · Accepted Answer

Gains from treasury stock transactions are not reported on the income statement. Instead, they are recorded as an adjustment to additional paid-in capital or retained earnings.

Use the Following Information to Answer the Question Below