Reference no: EM132937812
Questions -
Q1) Mega Corporation has 100,000 shares of P50 par value capital stock authorized. The minimum requirements for the stock subscription and payment thereof are complied with by the corporation. How much is the minimum paid up capital of the corporation?
A. 5,000,000
B. 1,250,000
C. 321,500
D. 312,500
Q2) Leon Corporation sold 500 shares of its P40 par value preferred stock for cash at P50 per share. In recording this transaction, there would be a
A. Credit to preference share capital for P25,000
B. Credit to preference share capital for P20,000
C. Credit to subscribed preference share capital for P20,000
D. Credit to share capital in excess of stated value for P5,000
Q3) Luningning Corporation sold for cash 400 shares of preferred stock with a par value of P50 per share at P56 per share. Also, 600 shares of common stock with no par value but with the stated value of P100 per share were sold for P102 per share. What would be the effect of the transaction on the total Share Premium?
A. 0
B. P1,200
C. P2,400
D. P3,600
Q4) Mario Corporation received subscription for 400 shares of capital stock with a par value of P20 per share. The subscription price was P23 per share. What would be the effect of the above transaction on the Share Capital account? Share Premium Account
A. Share Capital Share Premium
B. P8,000 Increase P1,200 Increase
C. 9,200 Increase 0
D. 0 1,200 Increase
E. 0 9,200 Increase
Q5) Mario Corporation received subscription for 400 shares of capital stock with a par value of P20 per share. The subscription price was P23 per share. What would be the effect of the above transaction on the Share Capital account? Share Premium Account
A. Share Capital Share Premium
B. P8,000 Increase P1,200 Increase
C. 9,200 Increase 0
D. 0 1,200 Increase
E. 0 9,200 Increase
Q6) Whistleblow, Inc. issued 500 shares of its P240 par value common stock to a lawyer for the latter's legal services. The shares were in payment for the 1,000 hours rendered by the lawyer who billed the company P160 per hour. On the date of stock issuance, the stocks were trading in the stock exchange at P320 per share.
A. Organization expense 160,000
Ordinary Share Capital 160,000
B. Organization expense 120,000
Ordinary Share Capital 120,000
C. Organization expense 160,000
Ordinary Share Capital 120,000
Share Premium 40,000
D. Organization expense 160,000
Ordinary Share Capital 120,000
Cash 40,000
Q7) A corporation's liability (Notes Payable) in the amount of P100,000 was paid by issuing its 1,000 shares of no par value common stock with stated value of P90 per share. On the date of payment, stocks were selling at P95 per share. The journal entry to record the above transaction would be
A. Notes payable 100,000
Ordinary Share Capital 100,000
B. Notes Payable 100,000
Ordinary Share Capital 90,000
Share Capital in excess of stated value 10,000
C. Notes Payable 100,000
Ordinary Share Capital 95,000
Share Capital in excess of stated value 5,000
D. Notes Payable 100,00
Ordinary Share Capital 90,000
Cash 10,000
Q8) Sweety Corporation sold 4,00 share of its P100 par value common stock to a subscriber at P105 per share receiving an initial payment of 305 of the subscriptions price. After repeated demands from the subscriber to pay the remaining balance but no avail, the corporation was forced to sell the delinquent shares at public auction, incurring advertising costs of P24,000. What should be the minimum bid for the delinquent shares?
A. P280,000
B. P304,000
C. P294,000
D. P318,000
Q9) A corporation issued 400,000 common shares in 200C. In the middle of 200D. 50,000 shares were reacquired. In the third quarter of 200D. additional 300,000 shares of common stock and 100,000 preferred shares convertible into 200,000 common shares were issued. On December 31, 200D, how many common shares were outstanding?
A. 900,000
B. 850,000
C. 700,000
D. 650,000
Q10) Shares of treasury stock acquired for P20,000 were sold by the corporation to a new stockholders for P30,000. To record this transaction.
A. Treasury Share Capital would be credited for P30,000
B. Treasury Share Capital would be credited for P20,000
C. Share Premium would be credited for P10,000
D. Share Premium would be credited for P30,000
Q11) On June 1, 200D, a corporation acquired 200 shares of its own P100 par value common stock at P120 per share. On October 1, another 300 shares were acquired at P125 per share. On December 31, 200D, how much would be the restriction on retained earnings as a result of these two transactions?
A. 0
B. P50,000
C. P61,500
D. P62,500
Q12) In 200C, a corporation issued 50,000 shares of P10 par value common stock at P100 per share. The corporation reaquired 20,000 of these share in 200D at P150 per share and immediately cancelled these shares.In connection with the retirement of 20,000 shares, the corporation should debit
A. Share premium for P2,800,000
B. Share premium for P200,000 and Retained earnings for P2,800,000
C. Share premium for P1,000,000 and Retained earnings for P1,800,000
D. Share premium for P1,800,000 and Retained earnings for P1,000,000
Q13) A corporation is authorized to issue 15,000 common shares with a par value of P100 per share. 11,000 shares are issued and 1,000 of which are in the treasury. How many shares are outstanding (shares to entitled to receive dividends)?
A. P1,000
B. P10,000
C. P11,000
D. P15,000
Q14) A corporation declared a cash dividend on its common stocks on December 31, 200A, Payable on January 15, 200B.How would this dividend declaration affect the total stockholders' equity on the following dates?
A. December 31, 200 A January 15, 200B January 31, 200B
B. No effect no effect decrease
C. No effect decrease no effect
D. Decrease no effect no effect
E. Decrease no effect decrease
Q15) When will the liability for the dividends declare be recognized?
A. On the date of declaration
B. On the date of record
C. On the date of payment
D. No liability will be recognized
Q16) On December 31, 200C, a corporation declared a property dividend (merchandise) to be distributed on January 31, 200D to stockholders of record as of January 15, 200D. On December 31, 200C, goods costing P100,000 with a market value of P120,000 were set aside for distribution On the date declaration, how much should be charged to retained earnings?
A. P0
B. P20,000
C. P100,000
D. P120,000
Q17) On June 30, 200E, a corporation declared a 10% common stock dividend on its 100,000 shares of P10 par value common stock issued and outstanding. The fair market value of the common stock was P30 per share. This stock dividend (Bonus issue) would
A. Not affect the total stockholders' equity
B. Decrease the total stockholders' equity by P100,000
C. Decrease the total stockholders' equity by P300,000
D. Decrease the total stockholders' equity by P200,000
Q18) Which of the following statements is TRUE?
A. Stock dividends payable account will be credited in the amount of P200,000
B. Stock dividend payable account will be credited in the amount of P300,000
C. Share capital from stock dividends account will be credited in the amount of P200,000
D. No share premium will be recognized
Q19) A corporation has 5,000 shares of common stock issued and outstanding. The par value is P100 per share. The market value on this date is P130 per share. The total retained earnings account has a balance of P380,000, of which P80,000 are restricted for some future contingencies. There are 200 shares in the treasury costing P25,000. The cash balance is P700,000. What is the maximum amount of cash dividends, which the corporation may declare?
A. P275,000
B. P300,000
C. P675,000
D. P700,000
Q20) A corporation declared on November 1, 200A a 10% scrip dividends (with interest at 12% P.A.) to all stockholders of record as of December 31, 200. A payable on June 1, 200B. On the date of declaration, there were 50,000 shares of common stock outstanding with a par value of P40 per share. How much is the accrued interest on December 31, 200A?
A. P3,333
B. P4,000
C. P12,000
D. P14,000