Reference no: EM132770814
Question 1 - XXX Corporation has incurred losses from operations for years. At the recommendation of the newly hired president, the board of directors voted to implement quasi-reorganization on June 30, 20x9. XXX's balance sheet is shown below:
Current assets P5,500,000 Current Labilities P4,000,000
PPE, net 13,500,000 Non-current liabilities 2,000,000
Other assets 2,000,000 Share capital, Par P10 16,000,000
Share premium 3,000,000
Deficit (4,000,000)
The stockholders approved the quasi-reorganization effective July 1, 20x9 to be accomplished by a reduction in property, plant and equipment in the amount of P3,500,000; a reduction in other assets of P1,500,000 and a reduction in par value by P5 per share. What is the balance of the shareholders' equity after the quasi-reorganization?
Question 2 - The shareholders' equity of Paula Corporation on December 31, 20x9 shows the following account balances:
12% Preference share capital, 9,000 shares P200 par P1,800,000
Ordinary share capital, 30,000 shares P40 par 1,200,000
Share premium 950,000
Retained earnings 1,350,000
The 12% preference share is cumulative and fully participating. No dividends were declared or paid since 20x8. If Paula is to be liquidated, the preference shareholders would receive par value plus a premium of P10 per share.
What is the book value per share of ordinary share? (Two decimal places, example 2.34)
Question 3 - The liability section of the statement of financial position of CC Co. on December 31, 20x8 showed:
Share dividends declared but not yet paid P50,000
Dividends in arrears on preference shares 25,000
Income tax withheld 1,500
Deferred income tax payable (reversed in 20x9) 10,000
Accounts payable, net of P5,000 debit balance in two supplier's account 55,000
Bank overdraft with Metro Bank 12,000
Mortgage loans incurred in 20x8 payable in ten annual installments starting July 1, 20x9 500,000
Redeemable preference shares - payable in 20x9 100,000
Redeemable preference shares - payable in 20x10 200,000
At what amount should the total current liabilities be shown?
Question 4 - An entity is involved in the exploration of mineral resources. It incurred the following expenditures:
Conducting topographical, geological, geochemical and geophysical studies P30
Constructing roads and tunnels 200
Determining volume and grade of deposits 10
Exploratory drilling 50
Examining and testing extraction methods and metallurgical or treatment processes 5
Other expenditures relating to the subsequent development of the resources 300
Permanent excavations 80
Researching and analyzing an area's historic exploration data 12
Surveying transportation and infrastructure requirements, and conducting market and finance studies 3
Trenching and sampling 90
The entity's policy is to recognize exploration assets and measure them initially at cost.
In accordance with PFRS 6, at what amount should exploration and evaluation assets be initially recognized in the financial statements of the entity?