4) Treasury Stock

Under the cost method, when treasury stock is reissued what value is it credited at, and how to you calculate the "contributed capital from treasury stock" amount?

1) it is reissued at cost 2) = reissue price - purchase price x # of shares

When reissuing treasury stock under the cost method, if there is no APIC to exhaust, what account is debited?

RTE

When reissuing treasury stock under the par method, if there is no APIC to exhaust, what account is debited?

RTE

When shares are retired, what category do they get placed back into?

authorized but unissued

Under the cost method, when treasury stock is purchased, what value is it debited at? (easy...)

cost

Under the par value method of accounting for treasury stock, where is treasury stock located on the balance sheet and what is it subtracted from?

it is subtracted from common stock

Under the cost method of accounting for treasury stock, where is treasury stock located on the balance sheet and what is it subtracted from?

it's the very last line item of the SHE section on the BS and is subtracted from the sum of everything above it

Is the APIC account that was credited when the stock was originally issued affected under the cost method?

no

What is the effect of treasury stock transactions on earnings?

nothing

In the accounting equation (A=L+E) which parts are effected when treasury stock is purchased, and what happens to them?

the net assets and SHE both decrease

Is the APIC account that was credited when the stock was originally issued affected under the par value method?

yes

Do you debit or credit treasury stock when its purchased?

debit

Treasury stock reduces the number of shares outstanding, but does it effect the number of shares issued? Why not?

no, because treasury stock is issued stock

Under the par value method, how to do calculate the affect to APIC when treasury stock is purchased?

= original issue price - par value x # of shares

Under the par value method, how do you calculate "contributed capital from treasury stock" amount?

= original issue price reissue - purchase price x # of shares

Can RTE ever be increased by treasury stock transactions?

No

Is treasury stock an asset?

No

What account is treasury stock a contra to?

SHE

Under the par value method, when treasury stock is purchased, what value is it debited at? (easy...)

par value