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When treasury shares are reissued as dividends, what amount shall be charged to accumulated profits?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

When treasury shares are reissued as dividends, what amount shall be
charged to accumulated profits?

A. Cost of the treasury shares
B. Par value of the treasury shares
C. Fair value of the treasury shares on the date of declaration
D. Fair value of the treasury shares on the date of issuance

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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