Pember Corporation Started Business in 2005 by Issuing 200,000 Shares

question 11

Multiple Choice

Pember Corporation started business in 2005 by issuing 200,000 shares of $20 par ordinary shares for $36 each.In 2010, 20,000 of these shares were purchased for $52 per share by Pember Corporation and held as treasury shares.On June 15, 2011, these 20,000 shares were exchanged for a piece of property that had an assessed value of $810,000.Perber's shares are actively traded and had a fair price of $60 on June 15, 2011.The cost method is used to account for treasury shares.The amount of share premium-treasury resulting from the above events would be

• A)$800,000.
• B)$480,000.
• C)$390,000.
• D)$160,000.

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