FINANCIAL ACCOUNTING AND REPORTING —_ VALIX/SIY/VALIX/ESCALA/SANTOS/DELA CRUZ. SHAREHOLDERS’ EQUITY 1. During the current year, an entity issued 10,000 ordinary shares with P100 par value and 20,000 convertible preference shares with P200 par value for P8,000,000. On the date of issuance, the ‘ordinary share is selling at P360 and the preference share is selling at P270. ‘The entity also issued 6% bonds with a maturity value of P6,000,000, together with 20,000 ordinary | shares with P100 par value for a combined cash amount of P11,000,000. The market value of the ordinary share cannot be determined. If the bonds were issued separately, the bonds would have sold for 5,000,000 on an 8% yield to maturity basis. c 1. What amount should be reported as share premium from preference shares? a. 4,000,000 . 6,000,000 ee 800,000 a 0 2. What amount should be reported a share premium from ordinary shares? a. 4,000,000 . 6,600,000 ©. 2,200,000" A 6,200,000 » An entity reported the following shareholders’ equity at the beginning of the current year: ‘Share capital, P10 par 5,000,000 Retained earnings 1,500,000 During the current year, the entity had the following share transactions: ¢ Acquired 20,000 treasury shares for P1,000,000 =2. * Sold 15,000 treasury shares at P60 per share, > * Sold the remaining treasury shares at P43 per share. ‘What amount should be reported as share premium at year-end? a 2,125,000 b. 2,150,000 i ©. 2,000,000 4. 1,975,000 i aaa . An entity had issued 100,000 ordinary shares. Of these, 5,000 shares were held as treasury at the beginning of current year. During the current year, transactions involving ordinary shares were: May 1” 2,000 shares of treasury were sold. Avg 1 10,000 previously unissued shares were sold. Nov 1 A3 for | share split took effect. 1. At year-end, how many ordinary shares were issued? _& 330,000 b. 110,000 c. 105,000 s d. 315,000 2. At year-end, how many shares are outstanding? fA a 321,000 ~b. 327,000 c. 315,000 d. 339,000 6764ft 2 A cv sy wen nyse nn ey te anny we 130 per share. Before recording the cancelation of the treasury shares, the enity had the following shareholders’ equity: Share capital, 50,000 shares originally issued at P75 2,500,000 Share premium 1,250,000 Retained earnings 1,000,000 Treasury shares, at cost 600,000 ‘What amount should be reported as share capital outstanding at year-end? a. 2,500,000 b. 1,900,000 e* 2,250,000 “4. 2,125,000 5. An entity was organized on January 1, 2020, On that date, the entity issued 200,000 shares with P10 par value at P15 per share. During the period January 1, 2020 through December 31, 2021, the entity reported net income of P2,000,000 and paid cash dividends of P500,000, On January 5, 2021, the entity purchased 10,000 shares at P20 per share to be held as treasury. On December 31, 2021, 5,000 treasury shares were sold at P30 per share and the remaining treasury shares were retired. What is the total shareholders’ equity on December 31, 2021? © 4,450,000 “b. 4,350,000 ©. 4,400,000 4. 4,950,000 x 6 Avs wh hfs tn SFI fe oh 100900 atried sha oF P100 par value. During the current year, the following transactions occurred: January 1 Sold 30,000 shares at P150 per share February 1 Issued 2,000 shares for legal services with fair value of P250,000. ‘The shares on this date are quoted at P140 per share. March 1 Purchased 5,000 treasury shares at a cost of P120 per share. October 31 —_Issued P5,000,000 convertible bonds at 120. The bonds are quoted at 98 November 15 Declared a 2 for | share split when the market value of the share was P160. December 15 Sold 20,000 shares at P75 per share. December 31 The net income for the year was P2,000,000. 1. What amount should be reported as share capital at year-end? a. 5,200,000 b. 3,600,000 4,200,000 “4, 5,300,000 2. What amount should be recognized as share premium at year-end? AS 2,050,000 b. 3,150,000 3,130,000 d. 2,650,000 3. What is the total shareholders? equity at year-end? a. 8,750,000 7,650,000 “e.. 9,350,000 4. 9,250,000 4, How many shares are outstanding at year-end? 2. 64,000 b. 79,000 . 74,000 “d. 84,000