Treasury shares were acquired for cash at a price above par value. The treasury shares were subsequently reissued for cash at a price above its acquisition price. If the cost method of accounting for treasury share transactions is used, what is the effect on total retained earnings during (1) Acquisition of Treasury Shares, and (2) Reissuance of Treasury Shares? a) (1) No effect, (2) Increase b) (1) No effect, (2) No effect c) (1) Increase, (2) Decrease d) (1) Decrease, (2) Increase

Treasury shares were acquired for cash at a price above par value. The treasury shares were subsequently reissued for cash at a price above its acquisition price. If the cost method of accounting for treasury share transactions is used, what is the effect on total retained earnings during (1) Acquisition of Treasury Shares, and (2) Reissuance of Treasury Shares? a) (1) No effect, (2) Increase b) (1) No effect, (2) No effect c) (1) Increase, (2) Decrease d) (1) Decrease, (2) Increase

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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