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Corp. currently has 5,000 no par value common shares outstanding, with a book value of...

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Question

Finance

Corp. currently has 5,000 no par value common shares outstanding, with a book value of $ 150,000.

Instructions

  1. How would you explain what treasury shares are to a group of first year students? (1 mark)
  2. What are two main reasons why a company may engage in "treasury shares"? (2 marks)
  3. There is specific guidance relating to the reaquisition, retirement and conversion of shares under ASPE, how should a company allocate the amount paid for purchasing its own share if the amount paid is greater than the original issue price? (3 Marks)
  4. Record the share transactions given below: (12 marks)

a) Bought 300 common shares at $ 31 each, to be held as treasury shares

b) Sold 80 treasury shares at $ 30

c) Sold 40 treasury shares at $ 34

d) Retired the rest of the treasury shares

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