For numerous reasons, a corporation may reacquire shares of its own capital stock. When a company purchases treasury stock, it has two options as to how to account for the shares: the cost method and the par value method.
Required: Compare and contrast the cost method and the par value method for each of the following:
- Purchase of shares at a price less than par value.
- Purchase of shares at a price greater than par value.
- Subsequent resale of treasury shares at a price less than purchase price but more than par value
A corporation may buy back its own share, whuich called treasury stock and company may intend to retain them for resale at... View the full answer