Reference no: EM133016901

Question - A firm has 100,000 shares of common stock issued and outstanding. These shares were originally issued for $12 each. A firm repurchases 20,000 shares of stock at $20 each.

12/31/2020 Common Stock, 100,000 shares issued 300,000

Paid-In Capital In Excess 900,000

Retained Earnings 1,200,000

What balance of retained earnings does the firm report after applying the stock repurchase under the a) Treasury Stock (Cost) Method b) Direct Retirement method?

a) $1,200,000; $800,000

b) $800,000; $1,200,000

c) $1,200,000; $1,040,000

d) $1,200,000; $1,200,000

e) $1,040,000; $1,200,000