CAP Corporation has reacquired 50,000 of itsshares at $13 per share. The average cost of theseshares was $11 per share and there was a priorcredit balance of $100,000 in the contributedsurplus account. Assuming the balance in thecontributed surplus account is the result of priortransactions relating to the shares now beingreacquired, the effect on retained earnings wouldbe as follows:a) a credit of $100,000.b) a credit of $650,000.c) a debit of $100,000.d) no impact.

When the shares are re acquired , the treasury stock account is debited and cash is credited .The…

Answered: e of $100,000 in the con

Business

Accounting

e of $100,000 in the con

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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