Question

Par value method JE

1. Buy back above issue price
2. Buy back below issue 10 par, 15 reissue price, repurchased for 12, 200 shares repurchased
3. Reissue shares: 100 shares repurchased for 20 resold for 22

Answer 1

The subject addressed is the accounting for repurchase and reissue of shares in the business field, with a focus on calculating net profit from stock transactions, typically taught at the college level.

Step-by-step explanation:

The student's question is focused on the accounting treatment for the repurchase and reissue of shares, as well as calculating the net profit from stock transactions. These topics typically fall under the broader umbrella of business and financial accounting, likely taught at the college level.

Calculating Net Profit from Stock Transactions

Net profit from a stock transaction is calculated by subtracting the total purchase cost and the transaction fees from the total sale proceeds. The formula for calculating net profit is: Net Profit = (Current Price per Share × Number of Shares Sold) - (Purchase Price per Share × Number of Shares Purchased) - Transaction Fees from Buying and Selling.

Example Calculation

The net profit in this example transaction is $11,980.