Thanks this was helpful! Just one question, in the journal where Adam repurchased 20,000 Share for 3$, what would happen to the Additional paid in Captial - TS, when the shares are sold. Will this account continue to be carried indefinitely. In the sale journals, this account is not impacted. However, will those balances be released?
Hello, I this video was very helpful. I understand why in a repurchase transaction the APIC-C/S and Retained Earnings accounts are used, but I don't understand why the balances are different. Which one comes first? How do you know Retained Earnings (or APIC-T/S if it had a positive balance) would be $20,000?
Thank you Professor Farhat!!! I have subscribed to your services before but this time I'm buckling down and took time off from work to study for the CPA exams. I don't usually follow lectures so I tend to read a lot but your videos are the exception! Truly a big help!
If I'm following this correctly, the reissued shares were out of treasury to common stock. Therefore, the Treasury at Par gets a credit (contra-equity account decreases via credit), and the APIC CS gets a credit as well (similar to how you'd allocate original issue for common stock at par value).
Thanks this was helpful! Just one question, in the journal where Adam repurchased 20,000 Share for 3$, what would happen to the Additional paid in Captial - TS, when the shares are sold. Will this account continue to be carried indefinitely. In the sale journals, this account is not impacted. However, will those balances be released?
Hello, I this video was very helpful. I understand why in a repurchase transaction the APIC-C/S and Retained Earnings accounts are used, but I don't understand why the balances are different. Which one comes first? How do you know Retained Earnings (or APIC-T/S if it had a positive balance) would be $20,000?
Apic TS is debit or credit nature?
Thank you Professor Farhat!!! I have subscribed to your services before but this time I'm buckling down and took time off from work to study for the CPA exams. I don't usually follow lectures so I tend to read a lot but your videos are the exception! Truly a big help!
Most welcome.
Would you happen to have a similar video using the Cost Method to account for Treasury Stock transactions?
The most logical explanation I've seen, thank you!!
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Thanks for the explanation
Sir, just a small doubt,
At re issue we are crediting APIC - CS
why not APIC - TS
If I'm following this correctly, the reissued shares were out of treasury to common stock. Therefore, the Treasury at Par gets a credit (contra-equity account decreases via credit), and the APIC CS gets a credit as well (similar to how you'd allocate original issue for common stock at par value).
Remember, the amount of stock issued over par will be issued to APIC common stock
This was so helpful! Thank youuuuu
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Thank you sir for correcting the video..@farhatlectures
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