When treasury stock accounted for by the single-transaction method is subsequently sold for more than its purchase price,the excess of the cash proceeds over the carrying value of the treasury stock should be recognized as:

Question

Quizplus · Accepted Answer

The excess of the cash proceeds over the carrying value of the treasury stock should be recognized as an increase in contributed capital, specifically in additional paid-in capital, as it represents a capital transaction rather than an income transaction.

When Treasury Stock Accounted for by the Single-Transaction Method Is