Treasury shares and Recapitalization

1. Treasury shares are stated at acquisition cost and are treated as deduction from shareholders' equity.

• True

• False

 2. Treasury shares are not entitled to receive dividend.

• true

• False

3. Treasury shares reduce the number of issued and outstanding shares.

• T

• F

4. The issuing corporation could acquire from the market its own equity shares, even in cases when it has no accumulated profits.

• T

• F

5. The treasury shares are to be taken in the books at acquisition cost, but could not be re-issued at lower than cost.

• T

• F

6. Acquisition of treasury share is recorded as debit and to be reported in the statement of financial position as asset.

• T

• F

7. If treasury shares are acquired at P100,000 which is P25,000 above par, its re-issuance for P150,000 will increase the shareholders' equity at date of re-issuance by P50,000.

• T

• F

8. The treasury share is retired as a "loss," if its cost is higher than par value.

• T

• F

9. If an issuing corporation re-acquired its own shares at a cost higher than par and these are immediately retired, this will result in a "loss."

• T

• F

10. Donated capital when subsequently sold will increase the shareholder's equity by the total par value of the donated capital.

• T

• F