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In keeping with a modernization of corporate stetutes in its home state, UMC Corporation decided in 2 discontinue accounting for reacquired shares as treasury stock,
In keeping with a modernization of corporate stetutes in its home state, UMC Corporation decided in 2 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 heid were reclassified es retired stock. At December 31. 2017, UMC's balance sheet reported the following shareholders equity (s in millions) Common stock, $1 par Paid-in capital-excess of par Retained earnings 285 82e 1,004 Treasury stock (6 million shares at cot)6 $1,993 Total shareholders' equity Required o. Identify the type of accounting change this decision represents b. Prepare the journal entry to effect the reclassificetion of treesury shares as retired shar
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