Reference no: EM133088160
Questions -
Q1. Celestial Inc. issued 8,000 shares of its P10 par ordinary shares to a CPA for 600 hrs. of accounting services rendered. A CPA usually bills P500 per hour of legal service. On this date of issuance, the share was selling at public trading at P20 per share. By what amount should the share premium account of Celestial Inc. increase as a result of the above transaction.
A. 300,000
B. 220,000
C. 80,000
D. None of the choices
E. 160,000
Q2. Travis Co. decided set up a corporation issuing 5000 shares of P20 par ordinary stocks trading at P25 in the stock market in exchange for an equipment with a fair value of 150,000. Similarly, Travis Co. has a similar equipment which it bought for 160,000. The equipment is depreciated over 5 years using the straight-line method and it has no salvage value. How much is the depreciation on the first year?
A. 32,000
B. Option 5
C. 25,000
D. 30,000
E. 20,000
Q3. A corporation issues 500 shares of P50 par ordinary share capital for store equipment. The market value of the store equipment is P35,000 and the market value of the stock is P55 per share. What amount should be charged to the store equipment?
A. P25,000
B. P10,000
C. None of the choices
D. P27,500
E. P35,000
Q4. A company issued 20,000 shares of its P70 par value ordinary share capital and 8,000 of its P80 par value preference share capital for a total amount of 1,800,000. At this date, the company's ordinary share capital was selling P 80 per share and the preference share capital was selling for P100 per share. What amount of the proceeds should be allocated to the preference share capital?
A. P640,000
B. P400,000
C. None of the choices
D. P800,000
E. P600,000
Q5. The shareholders' equity section of JAO Co. revealed the ff. on Dec. 31, 2015: Preference share (P100 par) P2,300,000; Share Premium - Preference: P805,000; Ordinary share (P15 par) P5,250,000; Share Premium - Ordinary: P2,750,000; Subscribed ordinary shares: P50,000; Accumulated Profits and losses: P1,900,000. How much is the legal capital?
A. P7,600,000
B. P13,055,000
C. P11,150,000
D. None of the choices
E. P7,550,000
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