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:

National Security

Measures and strategies implemented by a government to protect its country's citizens, economy, and institutions from threats.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another entity.

Offshoring

The relocation of a business process or operation from one country to another, typically to leverage lower labor costs.

Specialization

The process by which individuals, businesses, or countries focus on producing a limited range of goods or services to gain greater efficiency and productivity.