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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 5MC

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