On december 31 2006 pack corps board of directors canceled

Question

On December 31, 2006, Pack Corp.'s board of directors canceled 50,000 shares of $2.50 par value common stock held in treasury at an average cost of $13 per share. Before recording the cancellation of the treasury stock, Pack had the following balances in its stockholders' equity accounts:

 

Common stock	$540,000
Additional paid-in capital	750,000
Retained earnings	900,000
Treasury stock, at cost	650,000

In its balance sheet at December 31, 2006, Pack should report a common stock balance of

1. $0
2. $250,000
3. $415,000
4. $540,000