Use the Following Information for Questions

question 20

Multiple Choice

Use the following information for questions.
When Oslo Ltd. was organized last year, they issued 100,000 no par value common shares for $ 1,200,000. Earlier this year, the corporation purchased 4,000 of these shares at $ 15 per share, to be held in the treasury, and three months later, sold 2,000 treasury shares at $ 19 per share. There were no other treasury share transactions.
-London Corporation has 50,000 no par value common shares authorized, issued and outstanding. All 50,000 shares were issued at $ 40 per share. Retained earnings are $ 40,000. If 3,000 of these shares were reacquired at $ 50 and were held as treasury shares,

• A) shareholders' equity would increase by $ 150,000.
• B) contributed surplus would decrease by at least $ 30,000.
• C) shareholders' equity would decrease by $ 150,000.
• D) common shares would increase by $ 150,000.

---

Definitions:

Competitive Markets

A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar but differentiated, leading to competition on price, quality, and innovation.

Private Property Rights

Legal rights that grant individuals or organizations exclusive ownership and control over their property.

Competitive Market Economy

An economic system where businesses compete freely with minimal government intervention, prices are determined by supply and demand, and resources are allocated through the price mechanism.

Short Supply

Short supply refers to a market condition where the availability of a good or service is less than the demand for it, often leading to higher prices.