Reacquisition of shares
For numerous reasons, a corporation may reacquire its own shares. When a corporation does this, the CBCA requires that the purchased shares be cancelled.
Instructions
Explain how a corporation would account for each of the following:
a) Purchase of shares at a price less than the carrying value of the shares
b) Purchase of shares at a price greater than the carrying value of the shares
c) The effect on net income

Question

Quizplus · Accepted Answer

The Answer of Reacquisition of shares
For numerous reasons, a corporation may reacquire its own shares. When a corporation does this, the CBCA requires that the purchased shares be cancelled.
Instructions
Explain how a corporation would account for each of the following:
a) Purchase of shares at a price less than the carrying value of the shares
b) Purchase of shares at a price greater than the carrying value of the shares
c) The effect on net income

Reacquisition of Shares For Numerous Reasons, a Corporation May Reacquire Its Own Shares