Many states limit the amount that may be paid to acquire treasury stock to the balance in Retained Earnings.States also restrict the amount of retained earnings available for dividends by the cost of the treasury stock.
Required:
Explain why these restrictions are necessary and how they can be removed.

Question

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The Answer of Many states limit the amount that may be paid to acquire treasury stock to the balance in Retained Earnings.States also restrict the amount of retained earnings available for dividends by the cost of the treasury stock.
Required:
Explain why these restrictions are necessary and how they can be removed.

Many States Limit the Amount That May Be Paid to Acquire