Reference no: EM132774505

BERNADETTE CO. began operatios on January 1,2014. Authorized were 100,000 ordinary shares of P50 par value and 50,000 convertible preference shares of 10% P50 parvalue. The following transactions involving shareholders' equity occurred during the first year of operations.

Jan. 1 Issued 10,000 ordianry shares to the corporation promoters in exchange for property valued at P 1,250,000 and services valued at P250,000. The property had cost the promoters P900,000 three years before and was carried on the promoters' books at P750,000.

Feb. 22 Issued 15,000 preference shares at a price of P60 per share. Each share can be converted to five ordinary shares. The entity paid P25,000 to an agent for selling the shares.

Mar 10 Sold 25,000 ordinary shares for P130 per share. Issue cost were P100,000.

Apr 10 20,000 ordinary shares were sold under share subscriptions at P175 per share. No share certificates are issued until a subscription contract is paid in full. No cash was received.

July 15 Exchange 12,000 ordinary sharesand 20,000 preferences shares for a building with a fairvalue of P3,500,000. The building was originally purchased for P3,250,000 by the owner and has a book value of P2,400,000. In addition, 10,000 ordinary shares were sold for P 1,500,000 cash.

Aug 1 Received payments in full for half of the share subscriptions and partial payments on the rest of the subscriptions. Total cash received was P2,250,00. Share certificates were issued for the subscriptions paid in full.

Aug 31 Received notice from holders of share subscriptions for 5,000 shares that they would not pay further on the subscriptions because the price of the share had fallen to P95 per share. The amount still due on those contracts was P750,000. Amount previously paid on the contracts areforfeited according to the agreement.

Dec31 Net income for the first year of operations was P 1,500,000.

Based on the preceeding information, determine the correct balances of the following at December 31,2014:

Problem 1: Ordinary Share capital

a. P 2,850,000 b. P3,350,000 c. P 4,550,000 d. P 2,750,000

Problem 2: Share premium ordinary

a. P 5,775,000 b. P 7,675,000 c. P6,975,000 d. P 6,850,000

Problem 3: Share premium preference

a. P825,000 b. P950,000 c. P875,000 d. P850,000

Problem 4: Total shareholders equity

a. P14,275,000 b. P12,775,000 c. P13,775,000 d. P15,275,000