At its date of incorporation, Leynes, Inc. issued 100,000 shares of its P10 par ordinary shares at P11 per share. During the current year, Leynes acquired 30,000 of its ordinary shares at a price of P16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of P12 per share. Leynes had made no other issues or acquisitions of its own ordinary shares. What effect does the reissuance of the stock have on the following accounts? Retained Share Premium Earnings a. Decrease Decrease No effect Decrease Decrease No effect C. d. No effect No effect
At its date of incorporation, Leynes, Inc. issued 100,000 shares of its P10 par ordinary shares at P11 per share. During the current year, Leynes acquired 30,000 of its ordinary shares at a price of P16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of P12 per share. Leynes had made no other issues or acquisitions of its own ordinary shares. What effect does the reissuance of the stock have on the following accounts? Retained Share Premium Earnings a. Decrease Decrease No effect Decrease Decrease No effect C. d. No effect No effect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:At its date of incorporation, Leynes, Inc. issued 100,000 shares of its P10 par
ordinary shares at P11 per share. During the current year, Leynes acquired 30,000
of its ordinary shares at a price of P16 per share and accounted for them by the cost
method. Subsequently, these shares were reissued at a price of P12 per share.
Leynes had made no other issues or acquisitions of its own ordinary shares. What
effect does the reissuance of the stock have on the following accounts?
4.
Retained
Share Premium
Earnings
a.
Decrease
Decrease
b.
No effect
Decrease
Decrease
No effect
C.
d.
No effect
No effect
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