When Treasury Stock Is Reissued at a Price Above Cost

question 87

Multiple Choice

When treasury stock is reissued at a price above cost:

• A)The corporation recognizes a gain to be recorded on the income statement.
• B)Total paid-in capital is increased.
• C)The re-issuance is treated as an extraordinary item in the corporation's income statement.
• D)Retained earnings is increased.

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Definitions:

Damages Payable

Monetary compensation that a party is legally obligated to pay as a result of causing harm or loss to another party.

Injunction

A court order requiring an individual or entity to do or to refrain from doing a specific act, used as a remedy in many types of disputes.

Minimum Wage

The lowest legal hourly pay that employers are allowed to pay workers, established to ensure a basic standard of living for employees.

Pay Equity

A principle (or statute) requiring equal pay for work of equal value.