Answered: Donated shares will have the effect of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Donated shares will have the effect of reducing?

a. Outstanding shares

b. Authorized shares

c. Treasury shares

d. Issued shares

11. Upon exercising share options, the resulting increase in the additional paid-in capital would be equal to

a.The difference between the exercise price and the par value of the shares, plus the fair value of the share options

b. The difference between the fair value of the shares and the par value of the shares

c. The difference between the fair value of the shares and the par value of the shares, plus the fair value of the share options

d. The difference between the exercise price and the par value of the shares

1. What is the accounting for treasury share transactions?

a. On re-issuance of treasury shares, a gain or loss is recognized equal to the difference between the previous repurchase price and the re-issuance price.

b. Treasury shares are accounted for as financial assets.

c. On repurchase or re-issuance of previously purchased own shares, no gain or loss is recognized.

d. On repurchase of treasury shares, a gain or loss is recognized equal to the difference between the amount at which the shares were issued and the repurchase price for the shares.

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