Title | Accounting for Partnership and Corporation SOLMAN (Baysa & Lupisan, 2014) Chapter 10 |
---|---|
Author | Thyone Savva |
Course | Bachelor of Science in Accountancy |
Institution | Polytechnic University of the Philippines |
Pages | 9 |
File Size | 168.7 KB |
File Type | |
Total Downloads | 11 |
Total Views | 511 |
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CHAPTER 10 Share Capital Transactions Subsequent to Original Issuance E 10-1 1.a Ordinary Share Capital (2,000 sh x P20) Ordinary Share Premium (2,000 sh x P5) Paid-In Capital from Retirement of OSC Cash (2,000 sh x P15) b
2.
40,000 10,000 20,000 30,000
Ordinary Share Capital Ordinary Share Premium Retained Earnings Cash (2,000 sh x P30)
40,000 10,000 10,000 60,000
200,000 – 2,000 = 198,000 shares issued and outstanding
E 10 -2 1. Treasury Shares (5,000 sh x P20) Cash
100,000 100,000
Retained Earnings Retained Earnings Appropriated for Treasury Shares
100,000 100,000
Cash (3,500 sh x P28) Treasury Shares (3,500 x P20) Paid-In Capital from Sale of Treasury Shares
98,000
Retained Earnings Appropriated for Treasury Shares Retained Earnings
70,000
SHAREHOLDERS’ EQUITY 2. Contributed Capital: Ordinary Share Capital, P25 par, 100,000 shares issued, 98,500 shares outstanding, 1,500 shares in the treasury Ordinary Share Premium Paid-in Capital from Sale of Treasury Shares Retained Earnings: Retained Earnings Appropriated for Treasury Shares Unappropriated Retained Earnings Total Contributed Capital and Retained Earnings Less Treasury Shares, at cost - 1,500 shares Total Shareholders’ Equity
70,000 28,000
70,000
P2,500,000 1,000,000 28,000 P 30,000 1,470,000
E 10-3 1. Alternative 1 a. Received 5,000 Ordinary Shares as donation from a major shareholder
P3,528,000
1,500,000 P5,028,000 30,000 P4,998,000
APC – Chapter 10 (2007 edition)
b.
page 2
Cash Donated Capital
250,000 250,000
Alternative 2 a. Treasury Shares Donated Capital
200,000
b.
250,000
200,000
Cash Treasury Share PIC from Sale of Treasury Shares (or Donated Capital)
2.
after the donation Issued Outstanding
150,000 shs 145,000 shs
E 10-4 1.a Preference Share Capital (2,000 sh x P50) Preference Share Premium PIC from Conversion of PSC into OSC Ordinary Share Capital (2,000 sh x 4 x P10) b
c
2.a b c
c
after the sale of the don shs 150,000shs 150,000shs
100,000 50,000 70,000 80,000
Preference Share Capital (2,000 sh x P50) Preference Share Premium Retained Earnings Ordinary Share Capital (2,000 sh x 10 x P10)
100,000 50,000 50,000
Preference Share Capital (2,000 sh x P50) Preference Share Premium Retained Earnings Ordinary Share Capital (2,000 sh x 8 x P10)
100,000 50,000 10,000
Issued and outstanding PS 38,000 PS 38,000 PS 38,000
200,000
160,000
OS 108,000 OS 120,000 OS 116,000
E 10-5 1.a Ordinary Share Capital, P25 par Ordinary Share Capital, P5 par b
200,000 50,000
Ordinary Share Capital, P25 par Ordinary Share Capital, P100 par Ordinary Share Capital, P25 par Ordinary Share Premium Ordinary Share Capital, P15 par (20,000 sh x P15) Paid-In Capital from Reduction in Par Value of OSC
500,000 500,000 500,000 500,000 500,000 100,000 300,000 300,000
APC – Chapter 10 (2007 edition)
d
2a b
page 3
Ordinary Share Capital, P25 par Ordinary Share Premium Ordinary Share Capital, P25 stated value PIC from Exchange of Par for No-Par Share Capital 20,000 x 5 = 100,000 shs 20,000/4 = 5,000 shs
50,000 50,000
Retained Earnings Retained Earnings Appropriated for Treasury Shares
50,000
Cash (4,000 x P12) PIC from Sale of Treasury Shares Treasury Shares (4,000 x P10)
48,000
Retained Earnings Appropriated for treasury Shares Retained Earnings
40,000
Cash (1,000x P7) PIC from Sale of Treasury Shares Treasury Shares (1,000 x P10) Retained Earnings Appropriated for Treasury Shares Retained Earnings
2.
500,000 100,000
c. 20,000shs d. 20,000 shs
E 10-6 1.a Treasury Shares Cash
b.
500,000 100,000
Preference Share Capital (1,000x P100) Preference Share Premium PIC from Conversion of PSC into OSC Ordinary Share Capital (1,000 x 10 x P5) Issued and Outstanding
50,000
8,000 40,000
40,000 7,000 3,000 10,000 10,000 10,000 100,000 20,000 70,000 50,000
PS 9,000 shs OS 510,000 shs
P 10 -1 1.a PSC Subscription Receivable (10,000 sh x P125) OSC Subscription Receivable (20,000 sh x P60) PSC Subscribed (10,000 sh x P100) OSC Subscribed (20,000 sh x P50) Preference Share Premium Ordinary Share Premium Cash PSC Subscription Receivable (P1,250,000 x 50%) OSC Subscription Receivable (1,200,000 x 50%)
1,250,000 1,200,000 1,000,000 1,000,000 250,000 200,000 1,225,000 625,000 600,000
APC – Chapter 10 (2007 edition)
b.
c.
d.
e.
Cash PSC Subscription Receivable OSC Subscription Receivable
Preference Share Capital (3,000 sh x P100) Preference Share Premium (3,000 x P25) Ordinary Share Capital (3,000 sh x P50) PIC from Conversion of PSC into OSC
300,000 75,000
Cash (1,500 sh x P62) Treasury Shares (1,500 sh x P55) PIC from Sale of Treasury Shares
g.
Cash (2,000 x P54) Donated Capital
j.
k.
625,000 600,000 1,000,000 1,000,000
Received 2,000 ordinary shares as donation from a major shareholder
i.
1,225,000
PSC Subscribed OSC Subscribed Preference Share Capital Ordinary Share Capital Treasury Shares - Ordinary Share Capital (2,500 sh x P55) Cash
f.
h.
page 4
Cash (1,000 sh x P60) Treasury Shares (1,000 sh x P55) PIC from Sale of Treasury Shares Ordinary Share Capital, P50 par (23,000 x P50) Ordinary Share Premium Ordinary Share Capital, P30 stated value (23,000 sh x P30) PIC from Exchange of Par for No-Par Shares Income Summary Retained Earnings Retained Earnings Dividends Payable PS = 7,000 sh x P100 x 10% = P70,000 CS = 23,000 sh x P1 = 23,000
2. SHAREHOLDERS’ EQUITY Contributed Capital: Share Capital: 10% Preference Share Capital, P100 par, 20,000 shares authorized, 7,000 shares issued and outstanding
1,000,000 1,000,000 137,500 137,500
150,000 225,000 93,000 82,500 10,500
108,000 108,000 60,000 55,000 5,000 1,150,000 200,000 690,000 660,000 750,000 750,000 93,000 93,000
P700,000
APC – Chapter 10 (2007 edition)
Ordinary Share Capital, P30 stated value, 50,000 shares authorized, 23,000 shares issued and outstanding Additional Paid-in Capital: Preference share Premium Paid-in Capital from Exchange of Par for No-Par Shares Paid-in Capital from Sale of Treasury Shares Paid-in Capital from Conversion of PSC into OSC Donated Capital Total Contributed Capital Retained Earnings Total Shareholders’ Equity P 10-2 Requirement 1 a. Treasury Shares – Ordinary SC (5,000 sh x P16) Cash Retained Earnings Retained Earnings Appropriated for Treasury Shares b.
c.
d.
e.
f. g.
Preference Share Capital (10,000 sh x P100) Preference Share Premium (10,000 sh x P5) PIC from Conversion of PSC into OSC Ordinary Share Capital (10,000 x 4 x P20) Accounts Payable Ordinary Share Capital (500 sh x P20) Ordinary Share Premium Retained Earnings Dividends Payable PSC= 40,000 x P100 = P4,000,000 x 5% = P200,000 OSC = (150,000 + 40,000 + 500 – 5,000) x P2 =P371,000
page 5
690,000 P175,000 660,000 15,500 225,000 108,000
80,000 80,000 80,000 1,000,000 50,000 250,000 800,000 12,500 10,000 2,500 571,000 571,000
50,000
Retained Earnings Appropriated for treasury Shares Retained Earnings
32,000
Income Summary Retained Earnings
2. SHAREHOLDERS’ EQUITY Contributed Capital: Share Capital: 5% Preference Share Capital, P100 par, 40,000 shares
1,183,500 P2,573,500 657,000 P3,230,500
80,000
Land Treasury Shares (2,000 sh x P16) PIC from Sale of Treasury Shares
Ordinary Share Capital, P20 par(150,000 + 40,000 + 500) x P20 Ordinary Share Capital, P10 par
P1,390,000
32,000 18,000 32,000 3,810,000 3,810,000 200,000 200,000
APC – Chapter 10 (2007 edition)
issued and outstanding Ordinary Share Capital, P10 par, 381,000 shares issued, 378,000 shares outstanding, 3,000 shares in treasury Additional Paid-in Capital: Preference Share Premium Ordinary Share Premium Paid-in Capital from Sale of Treasury Shares Paid-in Capital from Conversion of PSC into OSC Total Contributed Capital Retained Earnings: Retained Earnings Appropriated for treasury Shares Unappropriated Retained Earnings Total Contributed Capital and Retained Earnings Less Treasury Shares at Cost (3,000 shares) Total Shareholders’ Equity
page 6
P4,000,000 3,810,000 P 200,000 752,500 18,000 250,000
P 48,000 1,081,000
P 7,810,000
1,220,500 P 9,030,500
1,129,000 P10,159,500 48,000 P10,111,500
P 10 – 3 SHAREHOLDERS’ EQUITY Contributed Capital: Share Capital: 10% Preference Share Capital, P50 par, 115,000 shares issued and outstanding P 5,750,000 Ordinary Share Capital, P5 par, 2,050,000 shares issued, including 5,000 shares in the treasury 10,250,000 Additional paid-in capital: Preference Share Premium P 1,150,000 Ordinary Share Premium 5,375,000 Paid-in Capital from Sale of Treasury Shares 30,000 Total Contributed Capital Retained Earnings: Retained Earnings Appropriated for Treasury Shares P 70,000 Unappropriated Retained Earnings 4,310,000 Total Contributed Capital and Retained Earnings Less Treasury Shares, at cost (5,000 shares) Total Shareholders’ Equity *A work sheet may be prepared to facilitate computation of the above balances.
P16,000,000
6,555,000 P22,555,000
4,380,000 P26,935,000 70,000 P26,865,000
Problem 10 – 4 Assets Liabilities SE APIC RE Net Income 1. D NE D NE NE NE 2. I NE I I NE NE 3. I NE I D* NE* NE I NE I NE* D* NE 4. NE NE NE D D NE *The indicated loss may be debited to the APIC arising from sale of the treasury Share Capital in No. 2 or such indicated loss may be debited to retained earnings.
APC – Chapter 10 (2007 edition)
page 7
P 10-5 Javier Company Statement of Changes in Shareholders’ Equity For the Fiscal Year Ended June 30, 2009
Balances, June 30, 2008 Issuance of 5,000 PSC @ P140 Issuance of 20,000 OSC @ P70 Retirement of 1,000 PSC @ P150 Purchase of 500 TS @ P80 Share l split of 2 for 1 Reissuance of TS @ P52 Declaration of dividends PSC = P3,400,000 x 10% OSC = 235,000 x P6 Profit for the year Balances, June 30, 2009
PS P3,000,000 500,000
OS P1,000,000 200,000
( 100,000)
APIC P 9,200,000 200,000 1,200,000 ( 40,000)
RE P2,550,000
(
TS
10,000) P400,000
60,000
P3,400,000
P1,200,000
P10,620,000
( 200,000) ( 340,000) ( 1,410,000) 750,000 P1,540,000
P200,000
MC10-1
A
Total profit since incorporation Total cash dividends paid Total value of Share Capital dividends distributed Retained earnings, end
P 420,000 ( 130,000) ( 30,000) P 260,000
MC10-2
B
1/7 - 40,000 sh x P12 12/2 - 6,000 sh x P13 12/31- Profit for the year Total shareholders’ equity, 12/31/08
P 480,000 ( 78,000) 300,000 P 702,000
MC10-3
B
P15 par x 2 = P30 5
MC10-4
C
200,000 sh 2 = 100,000 sh x P5
MC10-5
A
15,000 sh x 3 x p25
P1,125,000
MC10-6
A
1/1/07 100,000 sh x P15 2007 – 2009 - Profit - Cash dividends 1/10/09 - Treasury Shares (6,000 sh x P12) 11/20/09 - Reissue of Treasury Shares (4,000 sh x P8) Total shareholders’ equity
P1,500,000 450,000 ( 230,000) ( 72,000) 32,000 P1,680,000
MC10-7
B
MC10-8
A
Proceeds from sale of treasury Share Capital Cost of treasury Share Capital Paid-in capital from sale of treasury Share Capital
P 210,000 120,000 P 90,000
P6.00 500,000 shs
APC – Chapter 10 (2007 edition)
MC10-9 MC10-10 TM 39 1. T 2. T 3. F 4. F 5. F
page 8
B C
6. 7. 8. 9. 10.
T T T F T
11. 12. 13. 14. 15.
T T F F T
16. 17. 18. 19. 20.
F F T T F
TM 40 1. Treasury shares 2. Convertible preference shares 3. Stock or share split / share split-up 4. Recapitalization 5. Paid-in Capital from Retirement of Share Capital 6. Cost method 7. Share split down / reverse share split 8. Retained Earnings 9. Decrease 10. Retained Appropriated for Treasury shares 11. Memorandum entry 12. Selling price 13. Contributed Capital 14. Reacquisition by donation 15. Retirement of share capital TM 41 1. D 2, C 3. D 4. A 5. B 6. A 7. D 8. C 9. C 10. D 11. A 12. D 13. C 14. B 15. B 16. A 17. 18. 19.
A C B
6,000 x P20 = P120,000 (same as before the Share Capital split) 20,000 x P30 = P600,000 Authorized - 10,000; Issued - 4,400; Outstanding - 4,400 - 500 = 3,900 Authorized - 10,000 x 2 = 20,000; Issued - (4,400 + 100) x 2 = 9,000; Outstanding - (4,400 - 500 + 100) x 2 = 8,000 P1,650,000 - (1,000 shares x P40) = P1,610,000 100,000 shares x P30 = P3,000,000 (100,000 sh x P50) + (5,000 sh x P20) - (15,000 sh x P15) = P4,875,000
APC – Chapter 10 (2007 edition)
20.
B
page 9
100,000 shares x 3 - 300,000 shares - 15,000 shares = 285,000 shares
TM 42 Problem A:
1. 2. 3. 4. 5.
Outstanding Shares 230,000 400,000 400,000 200,000 195,000
Ordinary Share Capital P 4,600,000 4,000,000 8,000,000 3,000,000 3,900,000
Add'l Paid-In Capital P1,350,000 1,200,000 1,200,000 2,200,000 1,180,000
TM 43 a. Preference Share Capital (500 sh x P100) Preference Share Premium (500 sh x P20) Paid-In Capital from Retirement of PSC Cash (500 sh x P115) PSC 3,500 shs b.
d.
2,500 57,500
OSC 10,000 shs 25,000
Cash Treasury Shares Paid-In Capital from Sale of Treasury Shares
28,000
25,000
25,000 3,000
OSC 10,000shs
Preference Share Capital (1,000 sh x P100) Preference Share Premium (1,000 sh x P20) Ordinary Share Capital (1,000 sh x 4 x P20) PIC from Conversion of PSC into OSC PSC 3,000 shs
TSE P10,600,000 10,600,000 10,600,000 10,600,000 10,480,000
50,000 10,000
Treasury Shares (1,000 sh x P25) Cash
PSC 4,000 shs c.
Retained Earnings P4,650,000 5,400,000 1,400,000 5,400,000 5,400,000
100,000 20,000 80,000 40,000
OSC 14,000 shs
Ordinary Share Capital, P20 par Ordinary Share Capital, P5 par PSC 4,000 shs OSC 40,000 shs
200,000 200,000...