At Its Date of Incorporation, Emm Inc

At its date of incorporation, Emm Inc. sold 100,000 of its $ 10 par common shares at $ 11 per share. During the current year, Emm acquired 20,000 of these common shares at $ 16 per share to hold as treasury shares. Subsequently, these shares were sold at $ 12 per share. Emm has had no other sales or acquisitions of its common shares. What effect does the sale of the treasury shares have on the following accounts?

$$\begin{array}{l}\text {\(\underline{\text{ Retained Earnings }}\)~~~~~~~~ \(\underline{\text{ Contributed Surplus }}\) }\\\begin{array} { l r l } \text { A) } & \text {\( \ decrease\) } & ~~~~~~~~~~~~\text { \( \ decrease \) } \\\text { B) } & \text { \( \ no effect \) } &~~~~~~~~~~~~ \text { \( \ decrease \) } \\\text { C) } & \text { \( \ decrease \) } &~~~~~~~~~~~~ \text { \( \ no effect \) } \\\text { D) } & \text { \( \ no effect \) } & ~~~~~~~~~~~~\text { \( \ no effect \)}\end{array}\end{array}$$