Gupta Corp

question 52

Multiple Choice

Gupta Corp.purchased its own shares on January 1, 2017 for $20,000 and debited Treasury Shares 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 debit to

• A)Contributed Surplus to the extent that previous net "gains" from sales or retirements of the same class of shares are included therein; otherwise, to retained earnings.
• B)Contributed Surplus regardless of whether there have been previous net "gains" from sales or retirements of the same class of shares included therein.
• C)Retained Earnings.
• D)Loss from Sale of Treasury Shares.

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