For numerous reasons a corporation may reacquire shares of its own capital stock. When a corporation purchases treasury stock, it has two options as to how to account for the shares:
(1) Cost method, and
(2) Par value method.

Required
Write a short report that compares and contrasts the cost method with the par value method for each of the following:
1. Purchase of shares at a price less than par value.
2. Purchase of shares at a price greater than par value.
3. Subsequent resale of treasury shares at a price less than purchase price, but more than par value.
4. Subsequent resale of treasury shares at a price greater than both purchase price and par value.
5. Effect on net income.