Reference no: EM132745422

The shareholders' equity account balances of Image Corporation as of December 31, 2012 are as follows:

Ordinary Share Capital, P100 par; 50,000 shares authorized;
25,000 shares issued P 2,500,000
Share Premium 500,000
Accumulated Profits 1,000,000
Treasury stock, 2,000 shares at cost (320,000)
Total P 3,680,000

Problem 1: On January 2, 2013, Image sold the treasury shares on the open market at P200 per share. The entry to record the sale on the books of Image should include a credit to

a. gain on sale of treasury stock of P 80,000         c. accumulated profits of P 80,000
b. share premium of P 80,000                              d. share premium of P 120,000