Question(C) 1. On Septensber 1, 2015, Valdez Company reacquired 12,000 shares of ths$10par value ondinary shares for$15per share. Valdez uses the cost method to account for treasury shares. The joumal entry to record the reacquisition of the shares should debit a. Treasury Shares for$120,000. b. Share Capital-Ordinary for$120,000. c. Share Capital-Ordinary for$120,000and Share Premium-Ordinary for$60,000. 2. Long Co, issued 100,000 shares of$10par ordinary shares for$1,200,000. Long aequired 8,000 shares of its own shares at 515 per share. Three months later Long sold 4,000 of these shares at$19per share. If the cost method is used to record treasury shares transactions, to record the sale of the 4,000 treasury shares, Long should credit a. Treasury Shares for$76,000. b. Treasury Shares for$40,000and Share Premium-Treasury for$36,000. c. Treasury Shares for$60,000and Share Premium-Treasury Stock for$16,000. d. Treasury Shares for$60,000and Share Premium-Ordinary for$16,0003. Glavine Company issues 6,000 shares of its$5par value ordinary shares having a market value of$25per share and 9,000 shares of its$15par value preference shares having a fair value of$20per share for a lump sum of$288,000. The proceeds allocated to the ordinary shares is a.$30,000b.$130,909c.$150,000d.$157.09

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question(C) 1. On Septensber 1, 2015, Valdez Company reacquired 12,000 shares of ths$10par value ondinary shares for$15per share. Valdez uses the cost method to account for treasury shares. The joumal entry to record the reacquisition of the shares should debit a. Treasury Shares for$120,000. b. Share Capital-Ordinary for$120,000. c. Share Capital-Ordinary for$120,000and Share Premium-Ordinary for$60,000. 2. Long Co, issued 100,000 shares of$10par ordinary shares for$1,200,000. Long aequired 8,000 shares of its own shares at 515 per share. Three months later Long sold 4,000 of these shares at$19per share. If the cost method is used to record treasury shares transactions, to record the sale of the 4,000 treasury shares, Long should credit a. Treasury Shares for$76,000. b. Treasury Shares for$40,000and Share Premium-Treasury for$36,000. c. Treasury Shares for$60,000and Share Premium-Treasury Stock for$16,000. d. Treasury Shares for$60,000and Share Premium-Ordinary for$16,0003. Glavine Company issues 6,000 shares of its$5par value ordinary shares having a market value of$25per share and 9,000 shares of its$15par value preference shares having a fair value of$20per share for a lump sum of$288,000. The proceeds allocated to the ordinary shares is a.$30,000b.$130,909c.$150,000d.$157.091

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