Pixel Points Inc

question 53

Essay

Pixel Points Inc.has a single class of shares.As at its year ended December 31,2017,the company had 1,000,000 shares issued and outstanding.These shares have a book value of $5,000,000 on the balance sheet.
During 2018,Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share.The company held these shares in treasury and later found a buyer for half of these shares at $8 per share.The other shares were sold at $6 to another investor.
Required:
Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions.Record the share transactions using the single-transaction method for treasury shares,which is the preferred accounting method.

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Definitions:

Price Level

An indicator reflecting the average prices of goods and services in an economy at a given time, showcasing the cost of living and inflation.

Firms' Expectations

The outlook or anticipations of businesses regarding future economic conditions, sales, and profitability, which can influence their investment and production decisions.

Nominal Wage Rates

The amounts of money paid to workers before adjustments for inflation.

Price Level

A measure of the average prices of goods and services in an economy at a given time, often reflected in a price index.