Treasury Stock Flashcards
1
Q
Who OWNS T-Stock?
A
No one. A firm cannot OWN itself.
2
Q
What are the two methods of acctg for T-Stock?
A
Cost method and par method.
3
Q
How would a purchase of 10 T-Stock for $20 a share be recorded under the cost method?
A
dr. T-Stock (10*20) 200 (+)
cr. Cash 200(-)
4
Q
What is the JE for a T-Stock reissue (greater than cost) under the cost method?
A
dr. Cash (+) (#purchased * purchase price)
cr. Contributed Capital (-) (New MP- Old MP)*#Purchased (-)
cr. T-Stock (# x Old MP) (-)
5
Q
What is the JE for a T-Stock reissue (less than cost) under the cost method?
A
dr. Cash (+) (#purchased * purchase price)
dr. Retained Earnings (-) plug
cr. Contributed Capital (-) (New MP- Old MP)*#Purchased (-)
cr. T-Stock (# x Old MP) (-)
