Question
Porter Corp. purchased its own par value shares on January 1, 2019 for 20,000 and debited the treasury shares account for the purchase price. The
Porter Corp. purchased its own par value shares on January 1, 2019 for 20,000 and debited the treasury shares account for the purchase price. The shares were subsequently sold for 12,000. The 8,000 difference between the cost and sales price should be recorded as a deduction from
a. share premiumtreasury to the extent that previous net gains from sales of the same class of stock are included therein; otherwise, from retained earnings.
b. share premiumtreasury without regard as to whether or not there have been previous net gains from sales of the same class of shares included therein.
c. retained earnings.
d. net income.
e. none of the above.
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