Use the following information to answer the question below. On January 1,20x5,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 1,20x5,Falcon purchased 3,100 shares of treasury stock for $19 per share and later sold the treasury shares for $26 per share on March 2,20x5.
-What amount of gain due to these treasury stock transactions should be reported on the income statement for the year ended December 31,20x5 ?
A)$0
B)$21,700
C)$3,100
D)$2,170

Question

Quizplus · Accepted Answer

Gains or losses on treasury stock transactions are not reported on the income statement. Instead, they are accounted for directly in equity.

Use the Following Information to Answer the Question Below