Case 15-3 Accounting for Treasury Stocks For numerous reasons, a corporation may reacquire shares of its own capital stock. When a company purchases treasury stock, it has two options as to how to account for the shares: the cost method and the par value method. Required: Compare and contrast the cost method and the par value method for each of the following: a. Purchase of shares at a price less than par value b. Purchase of shares at a price greater than par value c. Subsequent resale of treasury shares at a price less than purchase price but more than par value d. Subsequent resale of treasury shares at a price greater than both purchase price and par value e. Effect on net income