QUESTION 9

1.A company issues 10,000 shares of its own $10 par value common stock to the public for $19 per share. Later, 1,000 of these shares are bought for $21 per share as treasury stock. Which of the following statements is true?

Losses on the resale of these shares would impact reported net income for the year although gains would not

The cost of the treasury stock is reported by the company as an asset on its balance sheet

The par value method and the cost method have the same total impact on stockholders equity

Because this is a stock transaction, retained earnings cannot be affected by a re-issuance of these shares