Account for the purchase and sale of treasury stock
Response to the following problem:
Sanja Marketing Corporation reported the following stockholders' equity at December 31 (adapted and in millions):
Common stock.......................................... $ 36S
Additional paid-in capital ............................................... 286
Retained earnings .......................................................... 3,190
Treasury stock .................................................................. (690)
Total stockholders' equity....................................................$3,151
During the next year, Sanja Marketing purchased treasury stock at a cost of $34 million and resold treasury stock for $15 million (this treasury stock had cost Sanja Marketing $6 million). Record the purchase and resale of Sanja Marketing's treasury stock. Overall, how much did stockholders' equity increase or decrease as a result of the two treasury-stock transactions?