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Ex. 15-155 Treasury shares. In 2015, Mordica Co. issued 200,000 of its 500,000 authorized shares of $10 par value ordinary shares at $35 per

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Ex. 15-155 Treasury shares. In 2015, Mordica Co. issued 200,000 of its 500,000 authorized shares of $10 par value ordinary shares at $35 per share. In January, 2016, Mordica repurchased 15,000 shares at $30 per share. Assume these are the only share transactions the company has ever had. Instructions (a) What are the two methods of accounting for treasury shares? (b) Prepare the journal entry to record the purchase of treasury shares by the cost method. (c) 5,000 treasury shares are reissued at $33 per share. Prepare the journal entry to record the reissuance by the cost method. Solution 15-155 (a) The two methods of accounting for treasury shares are the cost method and the par value method (b) Treasury Shares Cash (c) Cash. Share Premium-Treasury Treasury Shares 450,000 450,000 165,000 15,000 150,000

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