When treasury shares are reissued belowthe reacquisition cost, the differencebetween the reissuance price and the cost isdebited to the following order of priority:(1) Share Premium – Treasury Shares; (2)Treasury Shares(1) Share Premium – Treasury Shares; (2)Retained Earnings(1) Retained Earnings; (2) Share Premium -Treasury Shares(1) Treasury Shares; (2) Retained Earnings

The treasury stock includes the shares that are bought back by the company from its own shares.

Answered: When treasury shares are reissued below…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 3MCQ: Authorized stock represents the: number of shares that are currently held by stockholders. number of...

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Similar questions

Treasury stock is listed as a(n) __________ on the balance sheet. (a) current liability (b) current asset (c) deduction from stockholders equity (d) addition to stockholders equity
Stockholders equity consists of which of the following? A. bonds payable B. retained earnings and accounts receivable C. retained earnings and paid-in capital D. discounts and premiums on bond payable
Par value of a stock refers to the ________. A. issue price of a stock B. value assigned by the incorporation documents C. maximum selling price of a stock D. dividend to be paid by the corporation
Authorized stock represents the: number of shares that are currently held by stockholders. number of shares that have been sold. number of shares that have been repurchased by the corporation. maximum number of shares that can be issued.
Treasury Stock A corporation sometimes engages in treasury stock transactions. Required: 1. Define treasury stock. 2. Why would a corporation acquire treasury stock? 3. Briefly explain the cost method of accounting for the requisition and reissuance of treasury stock. Assume the treasury stock is common stock and has a par value. 4. Briefly explain the balance sheet presentation of treasury stock under this method.
When treasury shares are reissued as dividends, what amount shall becharged to accumulated profits? A. Cost of the treasury sharesB. Par value of the treasury sharesC. Fair value of the treasury shares on the date of declarationD. Fair value of the treasury shares on the date of issuance
When the selling price of treasury shares is greater than its cost, the company credits the difference to a.Gain on Sale of Treasury Shares. b.Share Premium–Treasury. c.Treasury Shares. d.Share Premium–Ordinary.
7. If treasury shares are subsequently retired and the cost of the treasury shares exceeds the par value, the difference is charged Group of answer choices a. first, Share premium from the original issuance and then Retained Earnings. b. first to share premium from original issuance and then share premium from treasury shares of the same class. c. first to share premium from original issuance, and then share premium from treasury shares of the same class and then to retained earnings. d. first to share premium from treasury shares of the same class and then the balance to retained earnings.
Which of the following formulas is correct regarding the different status of shares of stock: authorized shares, issued shares, outstanding shares, and treasury shares? a. Issued – Treasury = Outstanding b. Issued + Treasury = Authorized c. Authorized + Treasury = Issued d. Issued + Outstanding + Treasury = Authorized
When non-par value shares are reacquired at a cost greater than their average issue price and cancelled, what account(s) should be debited? Select one: a. The share account for the total cost. b. The share account for the average issue price, contributed surplus-repurchases up to its account balance, other contributed surplus relating to this class of shares in proportion to the number of shares repurchased versus outstanding and lastly retained earnings for any remaining amount. c. The share account for the average per share amount, retained earnings for the additional amount, and lastly contributed surplus for any remaining amount. d. The share account for the average per share amount and a loss account for the additional amount. e. none of the above answers are correct.
See the attached image for information:a. How much is the balance of the Share Capital – Ordinary as of December 31, 2021? (Provide solution)b. How much is the balance of the Share Premium – Ordinary as of December 31, 2021? (Provide solution)c. How much is the balance of the Share Capital – Preference as of December 31, 2021? (Provide solution)
Which of the following affects the total Shareholders’ Equity? Appropriation of retained earnings Declaration of a scrip dividend Declaration of share split Retirement of treasury shares

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