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Treasury shares, Interest, Dividends, Losses and Gains 4. Which of the following statement is correct? a. Entity A reacquires its own shares for P10,000. The shares were originally issued for 94,000. Entity A recognizes a loss of P6,000. b. Gains and losses arising from a financial liability are recognized in directly in equity. c. Entity A declares dividends. Entity A will recognize the amount of the dividends as expense in profit or loss. d. Entity A settles a liability with carrying amount of P100,000 for P85,000. This transaction results to a P15,000 gain that is recognized in profit or loss.

Treasury shares, Interest, Dividends, Losses and Gains 4. Which of the following statement is correct? a. Entity A reacquires its own shares for P10,000. The shares were originally issued for 94,000. Entity A recognizes a loss of P6,000. b. Gains and losses arising from a financial liability are recognized in directly in equity. c. Entity A declares dividends. Entity A will recognize the amount of the dividends as expense in profit or loss. d. Entity A settles a liability with carrying amount of P100,000 for P85,000. This transaction results to a P15,000 gain that is recognized in profit or loss.

Corporate Financial Accounting
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
ChapterD: Investments
Section: Chapter Questions
Problem D.14EX: Balance sheet presentation of available-for-sale investments During 20Y8, its first year of...
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340 PAS 32 Treasury shares, Interest, Dividends, Losses and Gains 4. Which of the following statement is correct? a. Entity A reacquires its own shares for P10,000. The shares were originally issued for P4,000. Entity A recognizes a loss of P6,000. b. Gains and losses arising from a financial liability are recognized in directly in equity. c. Entity A declares dividends. Entity A will recognize the amount of the dividends as expense in profit or loss. d. Entity A settles a liability with carrying amount of P100,000 for P85,000. This transaction results to a P15,000 gain that is recognized in profit or loss.
Transcribed Image Text:340 PAS 32 Treasury shares, Interest, Dividends, Losses and Gains 4. Which of the following statement is correct? a. Entity A reacquires its own shares for P10,000. The shares were originally issued for P4,000. Entity A recognizes a loss of P6,000. b. Gains and losses arising from a financial liability are recognized in directly in equity. c. Entity A declares dividends. Entity A will recognize the amount of the dividends as expense in profit or loss. d. Entity A settles a liability with carrying amount of P100,000 for P85,000. This transaction results to a P15,000 gain that is recognized in profit or loss.
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