This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Treasury Stock issued stock that has been subsequently reacquired by the corporation Why would a company buy its own stock? The stock is selling for a low price is a good buy To avoid a hostile takeover avoid someone from buying too much and taking over so that the corporation can keep ownership of the company To fund employee stock options/ profit sharing or bonus plans To maintain a strong market for its sock or to stimulate trading Treasury stock is shown as a reduction in total stockholders equity on balance sheet Subtract from issued stock to get outstanding stock Purchasing treasury stock On Aug 1, 2009 Saturn Company buys 100 shares of its stock for $8 per share Journal entry to record the purchase...
View Full Document
- Fall '10