Treasury stock that was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined

A) income will be increased by $500
B) stockholders' equity will be increased by $3,500
C) stockholders' equity will be increased by $500
D) stockholders' equity will not change

When treasury stock is sold for more than its purchase price, the difference between the selling price and the purchase price is recorded as a gain in the stockholders' equity section of the balance sheet. In this case, the gain would be $500 ($3,500 - $3,000), which would increase stockholders' equity by $500. Income is not affected by this transaction.