Question 1: Suppose that the company issues 10,000 shares at $4 a share. Which of the figures below would change?
Question 2: What would happen to the company's books if instead it bought back 1,000 shares at $4 per share?
Common stock ($1 par value) $60,000
Additional paid-in capital 10,000
Retained earnings 30,000 = 100,000 Common equity
Common Equity 100,000
Treasury Stock (2,000 shares) 5,000 = 95,000 Net Common equity