Reference no: EM132933609
Talisay Corporation presented the following balance sheet for December 31, 2011:
Assets
Current Assets P 30,000
Treasury shares (at market, cost is P15,000) 14,000
Depreciable Fixed Assets 56,000
Total assets P 100,000
Liabilities and Shareholders' Equity
Current liabilities P 20,000
Ordinary shares subscribed (500 shares) 10,000
Long -term debt 8,000
Total Liabilities P 38,000
Ordinary shares (4,000 shares issued) P 18,000
10% Preference shares (1,000 shares issued) 12,000
Subscription receivable ( 4,000)
Reserve for depreciation 16,000
Accumulated profit 20,000
Total shareholders' equity 62,000
Total liabilities and shareholders' equity P 100,000
- Your investigation of Talisay Corporation's financial records indicates that all authorized shares have been either issued or subscribed.
- The par values for the ordinary and preference shares are P2 and P10, respectively. The treasury shares were originally purchased when the market price was P20 per share.
- During 2011, 250 treasury shares were resold for P25 per share. A gain on treasury share transactions' was credited for the difference between the original cost and the selling price. Furthermore, the excess cost over the market of the treasury shares at the end of the period was recognized as an unrealized loss on the 2008 income statement.
- You also discovered that a majority stockholder donated during 2011, a land which originally costed the stockholder P5,000 but with a market value of P9,000 during the date of donation. Subscription receivables are due six months from December 31, 2011.
Instruction:
Problem 1: Revise the December 31, 2011, balance sheet for Talisay Corporation as it should be presented according to generally accepted accounting principles.