Question Sep/Dec 2015 Flufftort Recorganisations part (a)

Hello Sir I can not figure it out in part a) of answer how company could buyback shre ofGupte with below accounting records Share buyback ( euity)Debit of 10 Cash Credit 7.6 Retained earnig Credit 2.4 I meant how Retained earning could increase for profit of the year? should not we pay from RE for the diffrence?could you please explain this? Thank you Regards