Question: 7. When treasury stock is purchased for cash at more than its par value, what is the effect on total stockholders equity under each of

7. When treasury stock is purchased for cash at more than its par value, what is the effect on total stockholders’ equity under each of the following methods?

Cost method Par value method

a. Increase Increase

b. Decrease Decrease

c. No effect Decrease

d. No effect No effect

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