What amount should highness report as retained earnings

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Q1) The equity section of Highness Corporation as of December 31, 2010, was as follows:

Share capital-ordinary, par value P2; authorized 20,000 shares; issued and outstanding 10,000 shares P 20,000

Share premium-ordinary 30,000

Retained earnings 75,000

P125,000

On March 1, 2011, the board of directors declared a 15% share dividend, and accordingly 1,500 additional shares were issued. On March 1, 2011, the fair value of the share was P6 per share. For the two months ended February 28, 2011, Highness sustained a net loss of P10,000.

What amount should Highness report as retained earnings as of March 1, 2011?

a. P72,000

b. P66,000

c. P62,000

d. P56,000

Q2) Armani Co. issued 100,000 shares of ordinary shares. Of these 5,000 shares were held as treasury stock at December 31, 2020. During 2021, transactions involving Armani's ordinary share were as follows:

Jan 2 1,000 shares of treasury shares were sold

Aug 6 10,000 shares of previously unissued shares were sold

Dec. 1 a 2 for 1 stock split took effect.

At Dec. 31, 2021, how many shares were issued and outstanding, respectively?

a. 222,000 and 214,000

b. 220,000 and 216,000

c. 222,000 and 218,000

d. 220,000 and 212,000

Reference no: EM132946132

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