Raymond Corporation has 7,500 ordinary shares in its treasury with par value of P100 and cost of P120. The shares were originally issued for P110 p share. The account "Share premium - Treasury" had a balance of P30,000. At the end of 2020, Raymond decided to retire its treasury shares. Which the following is incorrect? A. Ordinary shares and Share Premium -ordinary will be debited by P750,000 and P75,000, respectively, as a result of the retirement of treasury shares. B. Retained earnings will be debited by P45,000 when the treasury shares are retired. C. Treasury shares account will be credited by P750,000 upon retirement. D. Share premium - Treasury will have no balance at the end of the year after the retirement had been recorded.

Raymond Corporation has 7,500 ordinary shares in its treasury with par value of P100 and cost of P120. The shares were originally issued for P110 p share. The account "Share premium - Treasury" had a balance of P30,000. At the end of 2020, Raymond decided to retire its treasury shares. Which the following is incorrect? A. Ordinary shares and Share Premium -ordinary will be debited by P750,000 and P75,000, respectively, as a result of the retirement of treasury shares. B. Retained earnings will be debited by P45,000 when the treasury shares are retired. C. Treasury shares account will be credited by P750,000 upon retirement. D. Share premium - Treasury will have no balance at the end of the year after the retirement had been recorded.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Ayayai Company’s net income for 2020 is $52,900. The only potentially dilutive securities…

A: GIVEN Ayayai Company’s net income for 2020 is $52,900. The only potentially dilutive securities…

Q: Mann Corporation decided to issue common stock and used the $120,000 proceeds to retire all of its…

A: The company computes ratio to evaluate the performance of the entity. For example solvency ratio are…

Q: On December 31, 2020, Rebel Corporation's balance sheet reported the following. Common stock, $1 par…

A: ln a double accounting system journal entries are fast that affect the two account one having Debit…

Q: Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December…

A: Date Account Titles and Explanation Debit Credit Jan 15, 2021 Investment in CTN Corp. $1,850…

Q: LEE Company had the following amounts in the shareholders’ equity on January 1, 2020: Preference…

A: Accumulated Profits are part of net income that is not distributed to the equity shareholders at the…

Q: Santol Company retired 50,000 ordinary shares, P5 par value, which it held in the treasury at an…

A: Ordinary shares are those shares which are held in the form of common stock. These stock have voting…

Q: Net unrealized loss on available for sale securities (investment at FVTOCI) 20,000 Retained…

A: Total shareholders' equity A company's shareholders' equity can be calculated by subtracting total…

Q: The following is an incomplete statement of financial position of Bruno Limited as at 31 December…

A: A statement of financial position is a financial statement that presents a company's financial…

Q: On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market…

A: Share split in the business is one in which one share of the company is split or broken into…

Q: 121 par value Crane, Inc. has 11400 shares of 5%, £100 par value, noncumulative preference shares…

A: Preference shareholders carry the preferential right of payment of dividends and capital over common…

Q: PROBLEM NO. 1 Watusi Inc. began operations in January 2021 and reported the following results for…

A: Share: -The capital of the company is divided into small units. these small units are known as…

Q: Delta NV has share capital of $l m in shares of $0.25 each. At 31 May 2019 shares had a market value…

A: Right Issue :— It is the new shares issued to existing equity shareholders at lower price.…

Q: Want Answer in text

A: Step 1: Introduction to Short-Term Liability:Short term liability are the liabilities that the…

Q: Pfizer Company had 500,000 ordinary shares issued and outstanding at December 31, 2020. During 2021,…

A: No. of ordinary shares outstanding = 500000+400000 = 900,000 shares

Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

100%

Raymond Corporation has 7,500 ordinary shares in its treasury with par value of P100 and cost of P120. The shares were originally issued for P110 per
share. The account "Share premium - Treasury" had a balance of P30,000. At the end of 2020, Raymond decided to retire its treasury shares. Which of
the following is incorrect?
A. Ordinary shares and Share Premium -ordinary will be debited by P750,000 and P75,000, respectively, as a result of the retirement of
treasury shares.
B. Retained earnings will be debited by P45,000 when the treasury shares are retired.
C. Treasury shares account will be credited by P750,000 upon retirement.
D. Share premium - Treasury will have no balance at the end of the year after the retirement had been recorded.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

At December 31, 2021, Azores Corp. had 20,000 shares of P1 par value treasury shares that had been acquired in 2021 at P12 per share. In May 2022, Azores issued 15,000 of these treasury shares at P10 per share. At December 31, 2022, what amount should Azores show in notes to financial statements as a restriction of retained earnings as a result of its treasury shares transactions? Group of answer choices 5,000 60,000 90,000 240,000
On June 30, 2020, an interest payment date, $1030000 of Sarasota Co. bonds were converted into 26100 shares of Sarasota Co. common stock each having a par value of $5 and a market value of $56. There is $352700 unamortized discount on the bonds. Using the book value method, Sarasota would record O no change in paid-in capital in excess of par. O a $140420 increase in paid-in capital in excess of par. a $546800 increase in paid-in capital in excess of par. a $352700 increase in paid-in capital in excess of par.
What is the retained earnings balance ending December 31, 2021?
Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
In 2023, Ivanhoe Corp. acquired 8500 of its own no par value common shares at $19 per share, to be held in the treasury. In 2024. Ivanhoe sold 6400 of these shares at $24 per share. What accounts and what amounts should Ivanhoe credit in 2024 to record this sale? Treasury Shares $121600 $121600 $121600 Contributed Surplus $32000 Retained Earnings $32000 $32000 Common Shares $121600 $32000
at December 31, 2020, Proof Company had 450 000 shares of ordinary shares outstanding. On September 1, 2021, an additional 150 000 shares of ordinary shares were issued. in addition, Proof had P10 000 000 of 6% convertible bonds outstanding at December 31, 2020, which are convertible into 300,000 shares of ordinary shares. the carrying value of the bonds as of December 31, 2020 and based on a rate of 8% is P9 205 800. no bonds were converted into ordinary shares in 2021. the net income for the year ended December 31, 2021 was P3 750 000. assuming the income tax rate was 32%, what should be the diluted earnings per share for the year ended December 31, 2021 of Proof Company?a.5.20b.5.44c.5.31d.7.50
The Shareholders’ Equity of Purple Corporation showed the following: Ordinary Share capital, P 10 par, 900,000 shares issued P9,000,000; Ordinary Share Premium P2,700,000; Retained Earnings P1,300,000. On January 2, 2019, the corporation purchased and retired 100,000 shares of its share capital for P 1,800,000. a. In preparing the journal entry for this transaction, is there an indicated gain or indicated loss? b. how much is the indicated gain (loss)? If your answer is an indicated loss, put a parenthesis. c. how much will be credited to Cash? d. how much will be debited to Ordinary Share Premium??
At December 31, 2021, ABC had 20,000 shares of P1 par value treasury shares that had been acquired in 2021 at P12 pershare. In May 2022, ABC issued 15,000 of these treasury shares at P10 per share. At December 31, 2022, what amountshould ABC show in notes to financial statements as a restriction of retained earnings as a result of its treasury sharestransactions?O 5.000O 60,000O 90.0000 240.000
ATC Company issued all of its outstanding shares for P150 in 2018. On January 10, 2019, ATC acquired 100,000 treasury shares at P120 per share. ATC reissued 50,000 treasury shares for P7,500,000 on June 30, 2020 and retired the rest on December 31, 2020. ATC's equity accounts as at December 31, 2019 follow: Share capital, P100 par value P150,000,000 Share premium 75,000,000 Retained earnings 25,000,000 Total P250,000,000 What shall be the balance of share capital account on December 31, 2020? P144,000,000 P140,000,000 P145,000,000 P150,000,000
Provide Answer with calculation and explanation
Sheridan Company acquired 21400 shares of its common stock at $18 per share on February 5, 2025, and sold 10700 of these shares at $25 per share on August 9, 2026. The fair value of Sheridan's common stock was $22 per share at December 31, 2025, and $23 per share at December 31, 2026. The cost method is used to record treasury stock transactions. What account(s) should Sheridan credit in 2026 to record the sale of 10700 shares? O Treasury Stock for $192600 and Paid-in Capital from Treasury Stock for $74900. O Treasury Stock for $235400 and Retained Earnings for $32100. O Treasury Stock for $192600 and Retained Earnings for $74900. O Treasury Stock for $267500.
H&S Inc.’s profit for the year ended December 31, 2020, was $1,250,000. H&S’s capital structure is as follows: 500,000, $1.10, cumulative preferred shares 80,000, $3.00 non-cumulative preferred shares 200,000 common shares issued and outstanding In 2020, H&S, an entity subject to IFRS, did not declare or pay any dividends for the cumulative preferred shares. A dividend of $200,000 was declared for the non-cumulative preferred shares. What is H&S’s basic EPS? Question 24 options: a) $2.30 b) $2.50 c) $5.05 d) $5.25