Assuming a corporation has no contributed surplus booked, when shares are reacquired at a cost greater than their original issue price and cancelled, what account(s) should be debited?
A) the share account for the total cost
B) the share account for the original issue price and contributed surplus for the additional amount
C) the share account for the average per share amount and retained earnings for the additional amount
D) the share account for the average per share amount and a loss account for the additional amount
Correct Answer:
Verified
Q3: When all outstanding preferred shares are purchased
Q4: Dividends on cumulative preferred shares
A) must be
Q5: Total shareholders' equity represents
A) a claim to
Q6: The liability of shareholders is
A) similar to
Q7: The cumulative feature of preferred shares
A) limits
Q9: When shares are reacquired at a cost
Q10: Preferred shares are often issued instead of
Q11: In jurisdictions where par value shares are
Q12: The accounting problem in a lump sum
Q13: A possible result of the reacquisition and
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