In January 2017, Crane Company, a newly formed company, issued 9500 shares of its $8 par common stock for $13 per share. On July 1, 2017, Crane Company reacquired 950 shares of its outstanding stock for $10 per share. The acquisition of these treasury shares a. increased total stockholders\' equity. b. decreased the number of issued shares. c. decreased total stockholders\' equity. d. did not change total stockholders\' equity. Solution The right answer is option (C) decreased total stockholders\' equity. Justification: Statement of stockholders equity at the time of Formation of company Particulars Per Share Number of Shares Total Amount ($) Paid up Capital 8 9500 76,000.00 Paid in capital in excess of par 5 9500 47,500.00 Total Share holders equity 13 9500 1,23,500.00 Statement of stockholders equity after requiring treasury shares Particulars Per Share Number of Shares Total Amount ($) Paid up Capital 8 8550 (9500-950) 68,400.00 Paid in capital in excess of par 5 8550 42,750.00 Share holders equity before Treasury Shares 13 8550 111,150.00 Treasury Shares 10 950 9,500.00 Total Share holders equity 9500 (8550+950) 1,20,650.00 (9500+111,150) Statement of stockholders equity at the time of Formation of company Particulars Per Share Number of Shares Total Amount ($) Paid up Capital 8 9500 76,000.00 Paid in capital in excess of par 5 9500 47,500.00 Total Share holders equity 13 9500 1,23,500.00.