Question
Swifty Corporation purchased its own par value stock on January 1, 2020 for $18100 and debited the treasury stock account for the purchase price. The
Swifty Corporation purchased its own par value stock on January 1, 2020 for $18100 and debited the treasury stock account for the purchase price. The stock was subsequently sold for $10900. The $7200 difference between the cost and sales price should be recorded as a deduction from
additional paid-in capital to the extent that previous net "gains" from sales of the same class of stock are included therein; otherwise, from retained earnings.
retained earnings.
additional paid-in capital without regard as to whether or not there have been previous net "gains" from sales of the same class of stock included therein.
net income.
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