Goosen Company has outstanding 40,000 shares of €5 par ordinary shares which had been issued at €30 per share. Goosen then entered into the following transactions.1. Purchased 5,000 treasury shares at €45 per share.2. Resold 500 of the treasury shares at €40 per share.3. Resold 2,000 of the treasury shares at €49 per share.Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Goosen Company uses the cost method: I = Increase; D = Decrease; NE = No effect.

Treasury Stock: It refers to the shares that are reacquired by the corporation that are already…

Answered: Goosen Company has outstanding 40,000…

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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Goosen Company has outstanding 40,000 shares of €5 par ordinary shares which had been issued at €30 per share. Goosen then entered into the following transactions.

1.		Purchased 5,000 treasury shares at €45 per share.
2.		Resold 500 of the treasury shares at €40 per share.
3.		Resold 2,000 of the treasury shares at €49 per share.

Indicate the effect each of the three transactions has on the financial statement categories listed in the table below, assuming Goosen Company uses the cost method: I = Increase; D = Decrease; NE = No effect.

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