Question -
McGhee, Inc. purchases 5,000 shares of its own previously issued $6 per common stock for $18,000. Assuming the shares are held in the treasury, what effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders' equity?
The treasury stock purchased in the above question was resold by McGhee, Inc. for $21,000. What effect does this transaction have on (a) net income, (b) total assets, (c) total paid-in capital, and (d) total stockholders' equity?