Treasury stock : Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock. The journal entries are made at the time of sale and purchase of treasury stock as follows: For Purchase of treasury stock: Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased. For Sale / Reissuance of treasury stock: Cash account is debited for the amount received on sale of treasury stock and the Treasury stock account is credited with the cost of treasury stock. For the difference in cost and sale value, Additional Paid in Capital and Retained earnings accounts are adjusted. To indicate: The effect of resell of treasury stock on the income statement.
Treasury stock : Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock. The journal entries are made at the time of sale and purchase of treasury stock as follows: For Purchase of treasury stock: Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased. For Sale / Reissuance of treasury stock: Cash account is debited for the amount received on sale of treasury stock and the Treasury stock account is credited with the cost of treasury stock. For the difference in cost and sale value, Additional Paid in Capital and Retained earnings accounts are adjusted. To indicate: The effect of resell of treasury stock on the income statement.
Solution Summary: The author explains that resell of treasury stock does not affect the income statement of the corporation.
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.
Chapter 10, Problem 21DQ
To determine
Concept introduction:
Treasury stock:
Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock. The journal entries are made at the time of sale and purchase of treasury stock as follows:
For Purchase of treasury stock:
Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased.
For Sale / Reissuance of treasury stock:
Cash account is debited for the amount received on sale of treasury stock and the Treasury stock account is credited with the cost of treasury stock. For the difference in cost and sale value, Additional Paid in Capital and Retained earnings accounts are adjusted.
To indicate:
The effect of resell of treasury stock on the income statement.
What differentiates process-based validation from outcome testing? (A) Systematic review steps assess control effectiveness (B) Final results alone matter (C) Process review wastes time (D) Outcomes tell complete story
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Question: - How does resource attribution mapping enhance cost allocation? 1. Attribution wastes effort 2. Equal splitting works better 3. Usage patterns determine proper distribution methods 4. Simple rules suffice always.
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