ow will retained earnings be affected by purchase of treasury shares and subsequent sale of treasury shares at more than acquisition cost? Acquisition of TS Sale of TS a. no effect increase b. Increase no effect c. no effect no effect d. Increase decrease

ow will retained earnings be affected by purchase of treasury shares and subsequent sale of treasury shares at more than acquisition cost? Acquisition of TS Sale of TS a. no effect increase b. Increase no effect c. no effect no effect d. Increase decrease

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: A company sells treasury stock at less than its acquisition price. No previous sales of treasury…

A: Treasury shares are those shares which are repurchased or reacquired by the company from its…

Q: True or False, pls explain why 7) Earnings per share will decline in a stock repurchase transaction…

A: Introduction: Shares repurchase: Initially shares are issued to public. After some time the shares…

Q: When preference share is cumulative, preferred dividends not declared in a period are a. never paid…

A: Answer: When preference share is cumulative, preferred dividends not declared in a period are…

Q: A recent valuation formula uses multiples based on enterprise value (EV). How is EV defined? O Share…

A: Enterprise Value (EV) is a fundamental financial metric that aims to represent the total value of a…

Q: Increases in the fair value of unexercised share options after the vesting period shall be…

A: Share options are the rights provided to the employees for purchasing or acquiring shares of the…

Q: If treasury stock is reissued at a higher price than what it was repurchased for, it will result in…

A: Treasury stocks refer to the stocks bought back by the company. It reduces the shareholder's equity.…

Q: Several regulations limit dividend payments. Which of the following do not limit dividend payments?…

A: Several regulations limit dividend payments. Including

Q: 1. Which of the following correctly reflects the effect of dividend? On the date of declaration of…

A: *As per bartleby in case of multiple sub-parts only first 3 are supposed to be answered 1) The…

Q: If a corporation sells certain capital equipment for more than its initial purchase price, the…

A: Capital gain is a profit that is acquired because of the sale of a capital asset.

Q: When treasury shares are resold at a price above cost: a. Paid-in capital is reduced. b. Paid-in…

Q: The ledger of INDENTATION CUT Co. in 20x1 includes the following: Share capital Share premium…

A: Shareholders equity statement is very important part of balance sheet and it belongs to the wealth…

Q: The assumption indicates that a company will not be sold or liquidated in the near future. а.…

A: The going concern assumption indicates that a company will not be sold or liquidated in the near…

Q: What do an appropriation of accumulated profits and a declaration of a cash dividend have in common?…

A: Cash dividends are accounted for as a reduction of retained earnings(Accumulated profits)…

Q: Total shareholders' equity, beginning balances Common stock and additional paid-in capital:…

A: DIVIDEND PAYOUT RATIODividend payout ratio represents the amount of dividend paid to its…

Q: Which of the following items has no effect on the Accumulated Adjustments Account (AAA) of an S…

A: Cost of goods sold- The cost of goods sold is the cost of producing the goods that a business sells.…

Q: Under IFRS, a purchase by a company of its own shares results in: a. an increase in treasury…

A: Definition: Treasury stock: The shares which were reacquired or bought back by the company, but…

Q: Which of the following should be presented in the statement of changes in equity? A. Distributions…

A: The financial statements of the business include the income statement, balance sheet and statement…

Q: similarities and differences between paid in capital and retained earnings?

A: Paid in capital means the amount contributed by share holder in company as share capital Retained…

Q: What does book value per share measure? Current selling price of stock Amount shareholder would…

A: The book value per share (BVPS) is calculated by taking the ratio of equity available to common…

Q: Identify the effect the declaration of a stock dividend has on total share capital, retained…

A: Total Share Capital:Increase: The total number of shares outstanding increases due to the issuance…

Q: When treasury stock accounted for by the cost method is subsequently sold for more than its purchase…

A: Treasury stock refers to the shares which were bought back by the issuing company which was…

Q: Several regulations limit dividend payments. Which of the following do not limit dividend payments?…

A: the following do not limit dividend payments a. Liability restriction

Q: Indicate the effect of each of the following transactions on total equity by selecting the…

A: Total equity is the amount that represents the shareholding of the business owners. It includes…

Q: The price of the new share after dividends are paid is showing as incorrect?

A: Working Note#1Compute the amount of cash needed to finance the proposed dividend:Cash…

Q: Consider the following premerger information about a bidding firm (Firm B) and a target firm (Firm…

A: ParticularsFirm BFirm TNumber of shares5,4001,300Stock price$53.00$23.00Synergy benefits from…

Q: It is included in total as a component of shareholders’ equity.

A: Minority interest is that part of the net assets which is not owned by the parent company. It is…

Q: . The weighted-average number of shares outstanding during the period for all periods (other than…

A: Disclaimer: "Since you have asked multiple question in a single question we have answered first…

Q: Which of the following statements about post-acquisition earnings is incorrect? А. They are the…

A: Holding company A holding company refers to the company that holds and controls another company. The…

Q: Total shareholders' equity, beginning balances Common stock and additional paid-in capital:…

A: (1) Total Payout: It is a broader term that encompasses any form of payment made by a company to its…

Q: Retained earnings refers to Group of answer choices Cash and other assets The amount of net income…

A: Retained earnings are the portion of a company's net income that management retains for internal…

Q: Sale of treasury shares at less than cost shall be charged to * a. Loss on sale of treasury…

Q: What is reflected in the additional paid-in capital account? a. none of the above b. Whichever is…

A: additional paid-in capital account is shown in liabilities section of balance sheet under…

Q: When non-par value shares are reacquired at a cost greater than their average issue price and…

A: Stock that has no par value is known as no-par value stock. The price that investors are ready to…

Q: The excess of original issuance price over the retirement cost is * O Debited to retained earnings O…

A: Treasury stock: It refers to Shares which are bought back by the company from the open market but…

Q: The declaration and issuance of a share dividend a. increases ordinary shares outstanding and…

A: Share dividend means an stock dividend. In stock dividend the shareholders will receive shares…

Q: Under the equity method, a stock purchase is recorded at its original cost and is not adjusted to…

A: Equity method of accounting occurs when the investor or the company has major influence on the…

Q: The company purchasing share (acquisition) percentage will vary each and every company Select one:…

A: True

Q: 1. The cost method of accounting for stock investments is used when the company acquires a. Greater…

A: The different accounting methods are used when the company acquires its own assets are: Cost method,…

Question

How will retained earnings be affected by purchase of treasury shares and subsequent sale of treasury shares at more than acquisition cost?

Acquisition of TS Sale of TS

a. no effect increase

b. Increase no effect

c. no effect no effect

d. Increase decrease

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

The cost method of accounting for stock Group of answer choices recognizes dividends as income requires the investment to be decreased by the reported net income of the investee is only appropriate as part of a consolidation requires the investment to be increased by the reported net income of the investee
Which of the following items affect equity without going through the income statement? Group of answer choices A)Purchase of treasury stock. b)An extraordinary repair. c)A change in the estimated useful of an asset. D)Discontinued operations. e)None of the above
Which of the following is shown on a statement of cash flows? A share dividend A share split An appropriation of retained earnings None of these answer choices are correct
IWhich of the following transactions does not involve a cash flow? * O Dividend received O Issue of share capital O issue of share dividends O Prepayment of rent
1
Which statement best describes a possible result of treasury shares transactions? * May increase but not decrease retained earnings May increase net income if the cost method is used May decrease but not increase retained earnings The excess of original issuance price over the retirement cost is * Debited to retained earnings Credited to Share Premium - Retirement Debited to Share Premium - Treasury Shares and then Retained earnings None of the above
ESPAÑOL INGLÉS FRANCÉS The distribution of a dividend that represents a partial return of the original investment made by the shareholders is known as a. participatory dividend (participatory dividend). b. dividend in liquidation. С. property dividend (property dividend). Enviar com P
Which of the following is not correct relative to an appropriation of Retained Earnings? Question options: a Retained earnings set aside for a special or specific purpose. b Undistributed funds for dividends declared during the year. c Reduction in the amount available to shareholders as dividends d Total retained earnings remains unchanged.
At the date of declaration, all are true about a property dividend except: O A property dividend results in a reduction to Additional Paid-In Capital. O A property dividend results in a reduction to Retained Earnings O A property dividend results in a reduction of Total Stockholders' Equity O A property dividend can generate a gain or loss based on the property's relative fair value and book value. Which of the following is true about direct costs companies incur to sell stock? O All of these answers are correct. O These costs include underwriting costs. O They are accounted for as a reduction to additional paid-in capital. O They do not meet the definition of an expense.
When does the right of ownership to the current period’s dividend terminate? a) the declaration date b) the record date c) the payment date d) the ex-dividend date
A restriction on retained earningsa. Reduces retained earnings available for the declaration of dividends. b. Can be reported by an entry appropriating retained earnings. c. Has no effect on total retained earnings. d. All of the choices are correct.
How do you Calculate "Change in Retained Earnings"? (Ignore the number I have down in second column for Change in R/E, it is wrong)