Thorpe Corporation Holds 10,000 Shares of Its $10 Par Common

question 31

Multiple Choice

Thorpe Corporation holds 10,000 shares of its $10 par common stock as treasury stock, which was purchased in 2010 at a cost of $120,000. On December 10, 2011, Thorpe sold all 10,000 shares for $210,000. Assuming that Thorpe used the cost method of accounting for treasury stock, this sale would result in a credit to

• A) Paid-In Capital from Treasury Stock of $90,000.
• B) Paid-In Capital from Treasury Stock of $110,000.
• C) Gain on Sale of Treasury Stock of $90,000.
• D) Retained Earnings of $90,000.

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