Why would retained earnings be affected if there was plenty of APIC to cover $4 treasury premium?Can you help?user-506 -
I understand that when treasury stock purchase under Par Value method reduces APIC to the zero and then dips into retained earnings. But, just because the reacquisition cost above the original cost you automatically reduce retained earnings? You have amply APIC from the original stock sale. Why would you reduce Retained earnings by $4 per share and not just reduce the APIC more? I am assuming there is a reason.