Spencer Limited has 50,000 common shares outstanding, with an average issue price per share of $8. On August 1, 2017, the company reacquired and cancelled 600 shares at $40 per share. There was contributed surplus of $0.25 per share at the time of the reacquisition (total $12,500), which arose from net excess of proceeds over cost on a previous cancellation of common shares.
(a) Prepare the journal entry to record this transaction if Spencer prepares financial statements in accordance with ASPE.
(b) Discuss how the answer to part (a) may be different if Spencer pre- pared financial statements in accordance with IFRS.