Reference no: EM133132915
Questions -
Q1. Regine Company was organized at the beginning of current year with authorized capital of 100,000 shares of P200 par value. During the year, the entity had the following transactions affecting shareholders' equity:
Issued 25,000 shares at P220 per share.
Issued 1,000 shares for legal services when the fair value was P240 a share.
Issued 5,000 shares for a tract of land when the fair value was P260 a share.
What amount should be reported for share premium at year-end?
2. Liquir Corporation was organized on January 1, with an authorization of 1,000,000 ordinary shares with a par value of P5 per share. During the year, the corporation had the following equity transactions:
January 4 Issued 200,000 shares @ P5 per share.
April 8 Issued 100,000 shares @ P7 per share.
June 9 Issued 30,000 shares @ P10 per share.
July 29 Purchased 50,000 shares @ P4 per share
December 31 Sold 50,000 shares held in treasury @ P8 per share
What should be the total share premium as of December 31?
3. Basic company reported the following shareholders' equity at the beginning of current year:
Share capital, P10 par, outstanding 225,000 shares 2,250,000
Share premium 900,000
Retained earnings 2,190,000
During the year, the entity had the following transactions:
Acquired 6,000 treasury shares for P270,000.
Sold 3,600 treasury shares at P50 a share.
Sold the remaining treasury shares at P41 per share.
What is the total amount of share premium at year-end?
4. Eel Company holds 5,000 ordinary shares with P100 par value as treasury reacquired in 2019 for P700,000. On December 1, 2023, Eel reissued all 5,000 shares for P1,000,000. Under the cost method, the reissue would result in a credit to:
5. Cape Company disclosed the following shareholders' equity at the beginning of current year:
Share capital, par value P20 authorized 50,000 shares; issued and outstanding, 30,000 shares 600,000
Share premium 150,000
Retained earnings 230,000
During the year, the following transactions occurred relating to shareholders' equity:
1,000 shares were reacquired at P28 per share.
900 shares were reacquired at P30 per share.
1,500 shares of treasury were sold at P32 per share.
What amount should be reported as shareholders' equity at year-end?
6. The shareholders' equity section of Lakad Corporation's baance sheet at December 31, 2020, was as follows:
Ordinary shares (P10 par value, authorized 1,000,000 shares, issued 900,000 shares) P9,000,000
Share premium 2,700,000
Retained earnings 1,300,000
On January 1, 2021, Lakad purchase and retire 100,000 shares of its shares for P1,800,000. Immediately after retirement of these 100,000 shares, the balances in the share premium and retained earnings accounts should be
7. During 2019, Malolos Company issued 50,000, P100 par value convertible preference shares for P120 per share. One preference share can be converted into three ordinary shares at P50 par value. On December 31, 2019, when the market value of the ordinary shares was P60, all of the preference shares were converted. What amount should be debited to retained earnings as a result of the conversion?
Use the following information for the next three (3) questions:
Lightning Company is authorized to issue 600,000 shares of P10 par value ordinary shares and 200,000 of P50 parpreference shares. The following transactions occurred in 2021, the company's first year of operations.
Issued for a total of P1,100,000, 20,000 ordinary shares and 5,000 shares of preference shares. On this date each ordinary shares are selling at P30 per share while each preference is selling at P80 per share.•
Issued 2,500 preference shares to lawyers for services rendered in securing the corporate charter and for preliminary legal costs of organizing the corporation. The fair value of the services is P150,000.
Issued 3,000 ordinary shares, valued objectively at P96,000 to employee instead of paying them cash for their wages.
Issued 125,000 ordinary shares in exchange for a building value at P2,950,000 and land valued at P800,000.
8. The ordinary share balance on December 31, 2021:
9. The preference share balance on December 31, 2021:
10. The amount of share premium in excess of par at December 31, 2021: