FREE Trial

If a corporation uses the cost method to account for treasury stock, the treasury stock event is

Question:

If a corporation uses the cost method to account for treasury stock, the treasury stock “event” is treated as though it consists of two elements; if it uses the par value method, the reacquisition and reissuance transactions are viewed as separate events. Explain the accounting differences resulting from these concepts.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 60% (10 reviews)

Under the cost method the treasury stock event is viewed as consisting of the reacqui...View the full answer


answer-question-section
Answered By
tutor-profile-image
Salmon ouma
I am a graduate of Maseno University, I graduated with a second class honors upper division in Business administration. I have assisted many students with their academic work during my years of tutoring. That has helped me build my experience as an academic writer. I am happy to tell you that many students have benefited from my work as a writer since my work is perfect, precise, and always submitted in due time. I am able to work under very minimal or no supervision at all and be able to beat deadlines. I have high knowledge of essay writing skills. I am also well conversant with formatting styles such as Harvard, APA, MLA, and Chicago. All that combined with my knowledge in methods of data analysis such as regression analysis, hypothesis analysis, inductive approach, and deductive approach have enabled me to assist several college and university students across the world with their academic work such as essays, thesis writing, term paper, research project, and dissertation. I have managed to help students get their work done in good time due to my dedication to writing.
5.00+ 4+ Reviews 16+ Question Solved
Related Book For  book-img-for-question
Intermediate Accounting

Intermediate Accounting

ISBN: 978-0324300987

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

See More Books
Question Posted:
See More Questions

Related Video

Treasury stock refers to shares of a company\'s own stock that the company has bought back from its shareholders and now holds as a form of asset on its balance sheet. When a company buys back its own stock, it reduces the number of outstanding shares in the market, which can potentially increase the value of the remaining shares. Treasury stock can be acquired through a variety of methods, such as open market purchases, negotiated transactions, or as a result of converting convertible securities. Companies may buy back their own shares for a number of reasons, including to return capital to shareholders, to signal confidence in the company\'s future, or to use the shares for employee stock option plans. While treasury stock does not pay dividends, it can be reissued by the company at a later time, which could dilute the value of the remaining shares. Companies are required to report their treasury stock holdings in their financial statements.

Students also viewed these Accounting questions

Little Groot Big Feeling Marvel's Rocket And Groot Storybook - ISBN: 1338890328 - Free Book