Answer the following statements true (T) or false (F)
1. Manley Corporation issued 2,500 shares of its $50 par, 4% preferred stock on March 31, 2019, at $80 per
share. The amount credited to Paid-In Capital in Excess of Par - Preferred is $200,000.
2. Treasury stock is a corporation's own stock that it has previously issued and later reacquired.
3. A company may purchase treasury stock to support the company's stock price.
4. A company may purchase treasury stock to increase net assets by buying high and selling low.
5. Treasury stock is a contra equity account.
1. FALSE - Explanation: 2,500 shares × $30 par = $75,000 is credit to Paid-In Capital in Excess of Par-Preferred.
2. TRUE
3. TRUE
4. FALSE - Explanation: A company may purchase treasury stock to increase net assets by buying low and selling high.
5. TRUE
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