When treasury stock is reissued above cost under the cost method, Cash is debited for proceeds received, Treasury Stock is credited at cost, and the excess goes to APIC-Treasury Stock. No gain is recognized - treasury stock transactions are equity transactions. Answer A is correct. Answer B treats the reissuance as a new stock issuance rather than a treasury stock transaction. Answer C credits Treasury Stock at the reissuance price rather than cost. Answer D records a gain, which is not permitted for equity transactions.

Treasury stock repurchases reduce the number of shares outstanding, which decreases the weighted-average shares outstanding used in the EPS denominator. With the same net income spread over fewer shares, EPS increases. Answer A is correct. Answer B is incorrect - while the repurchase is not a liability, it does affect EPS through the denominator. Answer C is incorrect - the repurchase does not reduce net income; it is an equity transaction with no income statement effect. Answer D confuses book value per share with EPS; reducing total equity lowers book value per share but does not decrease EPS.

Treasury stock represents a company's own shares that have been repurchased. It is presented as a contra-equity account - a deduction from total stockholders' equity - at cost (under the cost method). It is never presented as an asset, since a company cannot own itself. Answer B is correct. Answer A incorrectly classifies treasury stock as an asset. Answer C treats it as an investment at fair value. Answer D reduces only Retained Earnings rather than appearing as a separate contra-equity line item.

Dividends are paid on outstanding shares only, not treasury shares. Shares outstanding = 60,000 issued - 8,000 treasury = 52,000. Total dividend = 52,000 x $2 = $104,000. Answer C is correct. Answer A applies $2 to all authorized shares. Answer B applies $2 to all issued shares without deducting treasury shares. Answer D applies $2 to 58,000 shares, which does not correspond to any correct share count.

When treasury shares are donated, the donation is recorded at the fair value of the shares given ($22 x 500 = $11,000), which is the amount of the charitable contribution expense. Treasury Stock is removed at cost ($20 x 500 = $10,000), and the $1,000 excess of fair value over cost is credited to APIC-Treasury Stock. No gain is recorded. Answer C is correct. Answer A records the expense at cost rather than fair value. Answer B records a gain rather than crediting APIC. Answer D omits the required expense recognition.

Under the cost method, the repurchase is recorded entirely as Treasury Stock at cost. Common Stock and APIC are not adjusted at repurchase - those accounts are only affected if the shares are later retired or reissued. Cash decreases by $30,000 and Treasury Stock (contra-equity) increases by $30,000. Answer A is correct. Answer B describes the par value method retirement entry. Answer C incorrectly adjusts APIC at repurchase under the cost method. Answer D charges Retained Earnings, which is not the cost method entry.

Transactions in a company's own equity instruments - including repurchase and reissuance of treasury stock - do not produce gains or losses in the income statement. All differences between cost and reissuance price are recorded in equity accounts (APIC-Treasury Stock or Retained Earnings). Answer B is correct. Answers A and C both record income statement effects, which are prohibited for treasury stock transactions. Answer D treats the repurchase premium as a loss, which is also incorrect.

Retiring treasury stock eliminates the Treasury Stock contra-equity balance and reduces Common Stock and APIC by corresponding amounts. Because the reduction in positive equity accounts equals the elimination of the contra-equity balance, total stockholders' equity is unchanged - it is a reclassification within equity components. Answer C is correct. Answer A incorrectly implies equity increases when a contra-equity account is removed. Answer B focuses only on par value. Answer D incorrectly suggests equity increases when APIC is debited (reduced) in the retirement entry.

Under the cost method, treasury stock is recorded at the full repurchase price. The entry is: Debit Treasury Stock $70,000 (2,000 x $35); Credit Cash $70,000. No allocation between par value and APIC is made at repurchase under the cost method. Answer D is correct. Answer A describes the par value method. Answer B records only the par value. Answer C debits Retained Earnings, which is incorrect for the cost method repurchase entry.

When treasury stock is reissued at exactly its cost, Cash is debited and Treasury Stock is credited at cost. There is no excess or deficiency, so no APIC or Retained Earnings entry is needed. Answer A is correct. Answer B credits Retained Earnings rather than Treasury Stock. Answer C credits Common Stock, which is not affected by treasury stock reissuances under the cost method. Answer D incorrectly omits the entry entirely - the transaction still needs to be recorded even when there is no gain or loss.