1.
X Company provided the following data at year-end:
Authorized share capital 5,000,000
Unissued share capital 2,000,000
Subscribed share capital 1,000,000
Subscription receivable 400,000
Share premium 500,000
Retained earnings - appropriated 600,000
Retained earnings - unappropriated 300,000
Revaluation Surplus 200,000
Treasury shares, at cost 100,000
What amount should be reported as total shareholders’ equity?
a. 5,100,000
b. 5,500,000
c. 4,900,000
d. 4,800,000
2. At the beginning of the current year, X Co. issued 10,000 ordinary shares of P20 Par value
and 20,000 preference shares of P20 par value for a total of P800,000. At this date, the ordinary
shares was selling for P36 and the preference shares was selling for P27.
Compute for the following:
a. What amount of the proceeds should be allocated to the preference shares?
b. What amount of the proceeds should be allocated to the ordinary shares?
c. What amount should be recorded as share premium from the issuance of preference
shares?
d. What amount should be recorded as share premium from the issuance of ordinary
shares?
3. At the beginning of the current year, X Company reported the following shareholders’ equity:
Share Capital, P10 par, outstanding 225,000 shares 2,250,000
Share Premium 1,500,000
Retained Earnings 2,000,000
During the year, the entity had the following transactions:
● Acquired 10,000 treasury shares for P50 per share
● Sold 5,000 treasury shares at P60 per share
● Sold 2,000 treasury shares at P45 per share
● Net income for the year was P2,500,000
Compute for the following:
a. What amount should be reported as total amount of share premium at year-end?
b. What amount should be reported as share capital at year-end?
c. What amount should be reported as total shareholders’ equity at year-end?
4. At the beginning of the current year, X Co. declared a 10% share dividend. The market price
of the entity’s 300,000 outstanding shares of P50 par value was P90 per share on that date. The
share dividend was distributed on July 1 when the market price was P100 per share. What
amount should be credited to share premium for the share dividend?
a. 1,200,000
b. 2,700,000
c. 1,500,000
d. 0
5. A cash dividend of P300,000 is declared by X co. the capital structure of the entity is as
follows:
Ordinary shares, P1 par, 500,000 shares outstanding P500,000
10% Preference shares, P100 par, 10,000 shares outstanding 1,000,000
Dividends are in arrears for two years at the beginning of the year.
Compute for the dividends to be distributed to preference shareholders, and ordinary
shareholders respectively, assuming:
a. The preference shares are non-cumulative and non-participating
b. The preference shares are cumulative and non-participating
c. The preference shares are non-cumulative and fully participating
d. The preference shares are non-cumulative and participating up to 16%
6. At the beginning of the current year, X company issued 100,000 ordinary shares. Of these,
5,000 shares were held as treasury. During the current year, the entity reported the following
transactions:
May 1 - 1,000 shares of treasury were sold
Aug. 1 - 10,000 unissued shares were sold
Nov. 15 - A 2-for-1 share split took effect
Compute for the following:
a. How many shares were issued at year-end?
b. How many shares were outstanding at year-end?
