Which statements correctly states an effect of acquisition

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Problem 1: In 2007, Winn, Inc. issued $1 par value common stock for $35 per share. No other common stock transactions occurred until July 31, 2009, when Winn acquired some of the issued shares for $30 per share and retired them. Which of the following statements correctly states an effect of this acquisition and retirement?

a. 2009 net income is decreased.

b. Additional paid-in capital is decreased.

c. 2009 net income is increased.

d. Retained earnings is increased.

Problem 2: When treasury shares are sold at a price above cost:

a. A gain account is credited.

b. A loss is reported.

c. A revenue account is credited.

d. Paid-in capital is increased.

Reference no: EM132786783

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