Treasury shares For numerous reasons, a corporation may reacquire (buy back) shares of its own shares. When a company purchases treasury shares, usually accounts for the shares using the cost method Instructions Explain how a company would account for each of the following: 1. Purchase of shares at a price less than par value. 2. Subsequent resale of treasury shares at a price less than purchase price, but more than par value. 3. Subsequent resale of treasury shares at a price greater than both purchase price and par value. 4. Effect on net income