Meta$34)$ Ace Industries has the following shareholders$$ equity accounts at December $31,20$X$1$:

Preferred stock, $$100$ par value, $10\%$ dividend,

$50,000$ shares issued and outstanding

$ $5,000,000$

Common stock, $$6$ par value, $1$ million shares issued

and outstanding

$6,000,000$

Paid$-$in capital in excess of par $119,000,000$

Unrestricted retained earnings $7,500,000$

Retained earnings restricted for plant expansion $2,500,000$

On December $15,20$X$1$ Ace Industries repurchased $200,000$ shares of its common stock for

$$10$ per share. Based on its shareholders$$ equity accounts, what can be inferred about this

purchase?

$34)\_\_\_\_\_\_$

A$)$ Ace is holding $$2,000,000$ of treasury stock which is being disclosed in the notes to

the financial statements.

B$)$ Ace retired the shares by reducing the common stock and paid$-$in capital accounts.

C$)$ Ace is reporting the shares as a $$2,000,000$ investment on the asset side of the balance

sheet.

D$)$ Not enough information is provided to determine how Ace recorded the purchase.