329478310 Audit of SHE 1 PDF

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Summary

Baltazar Inc. was organized on January 2, 2005, with authorized capital stock of 50,000 shares of 10%, P200 par value preferred, and 200,000 shares of no-par, no stated value common. During the first 2 years of the company's existence, the following selected transactions took place:2005 Jan. 2 Sold ...

Description

Baltazar Inc. was organized on January 2, 2005, with authorized capital stock of 50,000 shares of 10%, P200 par value preferred, and 200,000 shares of no-par, no stated value common. During the first 2 years of the company's existence, the following selected transactions took place: 2005 Jan. 2 Sold 10,000 shares of common stock at P16. 2 Sold 3,000 shares of preferred stock at P216. Mar. 2 Sold common stock as follows: 10,800 shares at P22; 2,700 shares at P25. Jul. 10 Acquired a nearby piece of land, appraised at P400,000, for 600 shares of preferred stock and 27,000 shares of common. (Preferred stock was recorded at P216, the balance being assigned to common.) Dec. 16 Declared the regular preferred dividend and a P1.50 common dividend. 28 Paid dividends declared on December 16. 31 The Income Summary account showed a credit balance of P450,000. 2006 Feb. 27 Jun. 17 Jul. 31 Sep. 30 Dec. 16 28 31

Reacquired 12,000 shares of common stock at P19. Resold 10,000 shares of the treasury stock at P23. Resold all of the remaining treasury stock at P18. Sold 11,000 additional shares of common stock at P21. Declared the regular preferred dividend and a P0.80 common dividend. Dividends declared on December 16 were paid. The income summary account showed a credit balance of P425,000.

QUESTIONS: Based on the above and the result of your audit, determine the balances of the following as of December 31, 2006: 1. Preferred stock a. P777,600

b. P600,000

c. P720,000

d. P729,600

2. Common stock a. P615,000

b. P966,500

c. P735,500

d. P696,100

3. Additional paid in capital

a. P38,000

b. P93,600

4. Total stockholders’ equity b. P2,388,150 a. P2,498,150

c. P57,600

d. P95,600

c. P1,892,100

d. P2,376,630

5. An auditor usually obtains evidence of shareholders’ equity transactions by reviewing the entity’s a. Minutes of board of directors meetings. c. Canceled stock certificates. b. Transfer agent’s records. d. Treasury stock certificate book....