In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2016 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2015, UMC's balance sheet reported the following shareholders' equity:

($ in millions)

Common stock, $1 par

$

190

Paid-in capitalexcess of par

760

Retained earnings

992

Treasury stock (6 million shares at cost)

(36

)

Total shareholders equity

$

1,906

a.

Prepare the journal entry to effect the reclassification of treasury shares as retired shares.

Event 1- Record the entry to reclassify treasury shares as retired shares.

b.	Identify the type of accounting change this decision represents.Choose correct option

This is a

	1)change in accounting principle
	2)change in reporting entry
	3)change in accounting estimate
4	)change in accounting method