How is treasury stock shown on the balance sheet?

Treasury stock must be recorded under the company's contra equity account (sometimes referred to as the treasury account).

The cost method is the most common procedure for recording treasury stock. When a company purchases shares from its stockholders, the dollar amount of the stock, including the brokerage fee, is recorded as a debit on the contra equity account. The same amount is then recorded as a cash credit, which means that the debit and cash amounts are identical for the transaction.