Respuesta :
The transaction if California Surf resells the 100 shares of treasury stock at $32 per share is 3,200.
Repurchase Journal entry for treasure stock :
Particular Debit($) Credit($)
Treasure Stock A/c (32×100) 3,200
to Cash A/c (32×100) 3,200
(being treasure stock repurchase)
If the company Resells the Treasure stock,
Journal entry will be :
Particular Debit($) Credit($)
Cash A/c (34×100) 3,400
to additional paid-up Capital A/c 200
to Treasure Stock A/c 3,200
(being treasure stock resell )
A treasury inventory or reacquired stock is stock that is offered lower back by way of the issuing business enterprise, decreasing the amount of amazing stock on the open marketplace ("open market" inclusive of insiders' holdings).
Inventory repurchases are used as a tax-efficient approach to position coins into shareholders' palms, in place of paying dividends, in jurisdictions that deal with capital profits extra favorably. on occasion, companies repurchase their stock after they sense that it is undervalued at the open market. different times, companies repurchase their stock to reduce dilution from incentive repayment plans for employees. any other cause for inventory repurchase is to defend the enterprise against a takeover risk. when shares are repurchased, they may both be canceled or held for reissue. If now not canceled, such shares are known as treasury stocks. Technically, a repurchased proportion is a corporation's very own percentage that has been offered lower back after having been issued and completely paid.
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