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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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?? 
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