Assume That a Company Issued 10,000 Shares for $30/share and a Par

question 14

Multiple Choice

Assume that a company issued 10,000 shares for $30/share and a par value of $5/share.1,000 shares were repurchased back at $22/share.Which statement about share repurchases and cancellation is correct?

• A)Contributed surplus from the share repurchase can be netted against the contributed surplus from share issuance.
• B)Contributed surplus from the share repurchase must be separated from the contributed surplus on share issuance.
• C)Contributed surplus arising from share repurchase must be debited in this transaction.
• D)Contributed surplus from the initial share issuance must now be credited in this transaction.

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