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  3. satchel inc. purchases 10,000 shares of its own pr

Satchel Inc. purchases 10,000 shares of its own previously issued $10 par common stock for...

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Question

Accounting

Satchel Inc. purchases 10,000 shares of its own previously issued $10 par common stock for $290,000. Assuming the shares are held in the treasury with the intent to reissue, what effect does this transaction have on total stockholder's equity?

Decreases total stockholders' equity

Increases total stockholders' equity

Has no effect on total stockholders' equity

Increases stockholders' equity but only the preferred portion.

  1. Satchel Inc. purchases 10,000 shares of its own previously issued $10 par common stock for $290,000. Assuming the shares are held in the treasury with the intent to reissue, what effect does this transaction have on net income?

    Dilutes net income

    Decreases net income

    Increases net income

    No effect on net income

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