On incorporation, Dee Inc. issued common stock at a price in excess of its par value. No other stock transactions occurred except treasury stock was acquired for an amount exceeding this issue price. If Dee uses the par value method of accounting for treasury stock appropriate for retired stock, what is the effect of the acquisition on the following?
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|
Net common stock |
Additional paid-in capital |
Retained earnings |
|
|
a. |
No effect |
Decrease |
No effect |
|
b. |
Decrease |
Decrease |
Decrease |
|
c. |
Decrease |
No effect |
Decrease |
|
d. |
No effect |
Decrease |
Decrease |