6,000 Shares of Common Stock with a Par Value of $10

question 52

Multiple Choice

6,000 shares of common stock with a par value of $10 per share were issued initially at $12 per share.Subsequently,2,000 of these shares were acquired as treasury stock at $15 per share.Assuming that the par value method of accounting for treasury stock transactions is used,what is the effect of the acquisition of the treasury stock on each of the following? Additional Retained
Paid-In Capital Earnings

• A) Increase No effect
• B) Increase Decrease
• C) Decrease Increase
• D) Decrease Decrease

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Definitions:

Segment Revenues

The income generated from one specific segment of a business, reflecting the financial performance of that segment.

Segment Expenses

Costs directly incurred by a specific business segment or division of a company, used in performance evaluation and resource allocation within diversified operations.

Revenue Test

A criterion or standard used to evaluate whether the revenue generated from a business activity is significant or meets certain thresholds.

Disaggregation

The process of breaking down reported data into more detailed components to provide a deeper understanding or insight into the data set.