Title | APC Chapter 10 - APC Solman |
---|---|
Course | Accountancy |
Institution | Polytechnic University of the Philippines |
Pages | 11 |
File Size | 519 KB |
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CHAPTER 10 Share Capital Transactions Subsequent to Original Issuance E 1 Ordinary Share Capital sh x P50) Ordinary Share Premium sh x P20) Capital from Retirement of OSC Cash sh x P45) b Ordinary Share Capital Ordinary Share Premium Capital from Retirement of OSC Cash sh x P60) 2. shares issued and...
CHAPTER 10 Share Capital Transactions Subsequent to Original Issuance E 10-1 1.a Ordinary Share Capital (2,000 sh x P50) Ordinary Share Premium (2,000 sh x P20) Paid-In Capital from Retirement of OSC Cash (2,000 sh x P45)
100,000 40,000 50,000 90,000
b Ordinary Share Capital Ordinary Share Premium Paid-In Capital from Retirement of OSC Cash (2,000 sh x P60)
100,000 40,000 20,000 120,000
2. 200,000 – 2,000 = 198,000 shares issued and outstanding E 10 -2 1. Treasury Shares (5,000 sh x P20)
100,000
Cash
100,000
Retained Earnings 100,000 Retained Earnings Appropriated for Treasury Shares 100,000 Cash (3,500 sh x P35) Treasury Shares (3,500 x P20) Paid-In Capital from Sale of Treasury Shares Retained Earnings Appropriated for Treasury Shares Retained Earnings
122,500 70,000 52,500 70,000 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 P2,500,000 Ordinary Share Premium 1,000,000 Paid-in Capital from Sale of Treasury Shares Retained Earnings: Retained Earnings Appropriated for Treasury Shares P Unappropriated Retained Earnings Total Contributed Capital and Retained Earnings Less Treasury Shares, at cost - 1,500 shares Total Shareholders’ Equity E 10-3
52,500 P3,552,500 30,000
1,470,000 1,500,000 P5,052,500 30,000 P5,022,500
1. a.
Alternative 1 Received 5,000 ordinary shares as donation from a major shareholder
b.
Cash Donated Capital 5,000 shares x P50 Alternative 2 a. Treasury Shares Donated Capital
b.
250,000 250,000
200,000 200,000
Cash Treasury Shares PIC from Sale of Treasury Shares (or Donated Capital)
2.
after the
250,000 200,000 50,000 after the sale
donation of the don shs 150,000 shs 150,000shs 145,000 shs 150,000shs
Issued Outstanding
E 10-4 1.a Preference Share Capital (3,000 sh x P50) Preference Share Premium (3,000 sh x P25) PIC from Conversion of PSC into OSC
150,000 75,000 105,000
Ordinary Share Capital (3,000 sh x 4 x P10) b Preference Share Capital (3,000 sh x P50) Preference Share Premium Retained Earnings Ordinary Share Capital (3,000 sh x 10 x P10) c Preference Share Capital (3,000 sh x P50) Preference Share Premium Retained Earnings Ordinary Share Capital (3,000 sh x 8 x P10) 2.a Issued and outstanding PS 47,000 b PS 47,000 c PS 47,000
120,000 150,000 75,000 75,000 300,000 150,000 75,000 15,000 240,000
OS 112,000 OS 130,000 OS 124,000
E 10-5 1.a Ordinary Share Capital, P20 par 1,000,000 Ordinary Share Capital, P4 par 1,000,000 b Ordinary Share Capital, P20 par Ordinary Share Capital, P80 par
1,000,000 1,000,000
c Ordinary Share Capital, P20 par Ordinary Share Premium
1,000,000 200,000
Ordinary Share Capital, P15 par (50,000 sh x P15)
750,000
Paid-In Capital from Reduction in Par Value of OSC
450,000
NOTE: ….. in exchange for one ordinary share with a par value of P20 instead of P25
1,000,000 d Ordinary Share Capital, P20 par Ordinary Share Premium 200,000 Ordinary Share Capital, P20 stated value 1,000,000 PIC from Exchange of Par for No-Par Share Capital 200,000 NOTE: …..one new ordinary share with a stated value of P20 in exchange for one ordinary share with a par value of P20
2. a 20,000 x 5 = 100,000 shares b 20,000/4 = 5,000 shares
c. 20,000 shares d. 20,000 shares
E 10-6 1.a Treasury Shares (5,000 shares x P10) Cash
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
50,000
8,000 40,000
40,000 7,000 3,000 10,000 10,000 10,000
b. Preference Share Capital (1,000x P100) Preference Share Premium
100,000 20,000
PIC from Conversion of PSC into OSC Ordinary Share Capital (1,000 x 10 x P5) 2. Issued and Outstanding
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) 1,250,000 OSC Subscription Receivable (20,000 sh x P60) 1,200,000 PSC Subscribed (10,000 sh x P100) 1,000,000 OSC Subscribed (20,000 sh x P50) 1,000,000 Preference Share Premium 250,000 Ordinary Share Premium 200,000
Cash
1,225,000
PSC Subscription Receivable (P1,250,000 x 50%) OSC Subscription Receivable (1,200,000 x 50%) b. Cash PSC Subscription Receivable OSC Subscription Receivable PSC Subscribed OSC Subscribed Preference Share Capital Ordinary Share Capital
625,000 600,000 1,225,000 625,000 600,000 1,000,000 1,000,000 1,000,000 1,000,000
c. Treasury Shares - Ordinary Share Capital (2,500 sh x P50) Cash
125,000
d. 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
e. Cash (1,500 sh x P65) Treasury Shares (1,500 sh x P50)
125,000
150,000 225,000 97,500 75,000
PIC from Sale of Treasury Shares
22,500
f. Received 2,000 ordinary shares as donation from a major shareholder g. Cash (2,000 x P56)
112,000
Donated Capital
112,000
h. Cash (1,000 sh x P60) Treasury Shares (1,000 sh x P50)
60,000 50,000
PIC from Sale of Treasury Shares i. 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 j. Income Summary Retained Earnings
10,000 1,150,000 200,000 690,000 660,000 1,500,000 1,500,000
k. Retained Earnings Dividends Payable PS = 7,000 sh x P100 x 10% = P70,000 CS = 23,000 sh x P1 = 23,000
93,000 93,000
!
2. SHAREHOLDERS’ EQUITY Contributed Capital: Share Capital: 10% Preference Share Capital, P100 par, 20,000 shares authorized, 7,000 shares issued and outstanding 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
P700,000 690,000 P1,390,000 P175,000 660,000 32,500 225,000 112,000
1,204,500 P2,594,500 1,407,000 P4,001,500
80,000 80,000 80,000
Retained Earnings Appropriated for Treasury Shares
80,000
b. Preference Share Capital (10,000 sh x P100) Preference Share Premium (10,000 sh x P5) PIC from Conversion of PSC into OSC
1,000,000 50,000 250,000
Ordinary Share Capital (10,000 x 4 x P20)
800,000
c. Accounts Payable Ordinary Share Capital (500 sh x P20) Ordinary Share Premium
12,500 10,000 2,500
d. Retained Earnings
571,000
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 e. Land Treasury Shares (2,000 sh x P16) PIC from Sale of Treasury Shares Retained Earnings Appropriated for treasury Shares Retained Earnings
571,000
50,000 32,000 18,000 32,000 32,000
f. Ordinary Share Capital, P20 par(150,000 + 40,000 + 500) x P20 3,810,000 Ordinary Share Capital, P10 par 3,810,000 g. Income Summary Retained Earnings
200,000 200,000
2. SHAREHOLDERS’ EQUITY Contributed Capital: Share Capital: 5% Preference Share Capital, P100 par, 40,000 shares issued and outstanding P4,000,000 Ordinary Share Capital, P10 par, 381,000 shares issued, 378,000 shares outstanding, 3,000 shares in treasury 3,810,000 P 7,810,000 Additional Paid-in Capital: Preference Share Premium P 200,000 Ordinary Share Premium 752,500 Paid-in Capital from Sale of Treasury Shares Paid-in Capital from Conversion of PSC into OSC Total Contributed Capital Retained Earnings:
18,000 250,000
1,220,500 P 9,030,500
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
P 48,000 1,081,000
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 P16,000,000 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 6,555,000 Total Contributed Capital P22,555,000 Retained Earnings: Retained Earnings Appropriated for Treasury Shares P 70,000 Unappropriated Retained Earnings 4,310,000 4,380,000 Total Contributed Capital and Retained Earnings P26,935,000 Less Treasury Shares, at cost (5,000 shares) 70,000 Total Shareholders’ Equity P26,865,000 *A work sheet may be prepared to facilitate computation of the above balances. Problem 10 – 4 Assets Liabilities SE APIC RE Profit 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.
P 10-5 Javier Company Statement of Changes in Shareholders’ Equity For the Fiscal Year Ended June 30, 2014 PS Balances, June 30, 2013
OS
APIC
RE
TS
P3,000,000 P1,000,000 P 9,200,000 P2,550,000
Issuance of 5,000 PSC @ P140
500,000
Issuance of 20,000 OSC @ P70
200,000 200,000
Retirement of 1,000 PSC @ P150 (
100,000)
1,200,000 (
40,000) (
10,000)
Purchase of 5,000 TS @ P80
P400,000
Share split of 2 for 1 Reissuance of TS @ P52
60,000
( 200,000)
Declaration of dividends PSC = P3,400,000 x 10%
(
OSC = 235,000 x P6
( 1,410,000)
Profit for the year Balances, June 30, 2014
340,000) 750,000
P3,400,000 P1,200,000 P10,620,000 P1,540,000 P200,000
MULTIPLE CHOICE
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, 12/31/14
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 1/1/12 100,000 sh x P15 2012– 2014 - Profit - Cash dividends 1/10/14 - Treasury Shares (6,000 sh x P12)
P1,500,000 450,000 ( 230,000) ( 72,000)
11/20/12 - Reissue of Treasury Shares (4,000 sh x P8) Total shareholders’ equity MC10-7
B 4,000 shares x P4 = P16,000
P 480,000 ( 78,000) 300,000 P 702,000 P6.00 500,000 shs
32,000 P1,680,000
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
MC10-9 B (100,000 +10,000) x 2 = 220,000 – [(5,000 – 1,000) x 2] = 212,000 MC10-10 B (40,000 x P105) – (600 x P110) + (400 x P95) + P830,000 – P200,000 = P4,802,000 TM 39 1. T 6. T 11. T 16. F 2. F 7. T 12. T 17. F 3. F 8. T 13. F 18. T 4. F 9. F 14. F 19. T 5. F 10. T 15. T 20. 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 6,000 x P20 = P120,000 (same as before the Share Capital split) 12. A 13. C 20,000 x P30 = P600,000 14. B 15. B Authorized - 10,000; Issued - 4,400; Outstanding - 4,400 - 500 = 3,900 16. A Authorized - 10,000 x 2 = 20,000; Issued - (4,400 + 100) x 2 = 9,000; Outstanding - (4,400 - 500 + 100) x 2 = 8,000
17. A P1,650,000 - (1,000 shares x P40) = P1,610,000 18. C 100,000 shares x P30 = P3,000,000 NOTE: 2010 should be 2014 19. B (100,000 sh x P50) + (5,000 sh x P20) - (15,000 sh x P15) = P4,875,000 20. B 100,000 shares x 3 - 300,000 shares - 15,000 shares = 285,000 shares TM 42 Problem A: Outstanding Ordinary Add'l Paid-In Retained Shares Share Capital Capital Earnings 1. 2. 3. 4. 5.
230,000 400,000 400,000 200,000 195,000
P 4,600,000 4,000,000 8,000,000 3,000,000 3,900,000
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)
50,000 10,000
Paid-In Capital from Retirement of PSC Cash (500 sh x P115) PSC 3,500 shs
Cash Treasury Shares Paid-In Capital from Sale of Treasury Shares
25,000 25,000 28,000 25,000 3,000
OSC 10,000 shs
c. 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
2,500 57,500
OSC 10,000 shs
b. Treasury Shares (1,000 sh x P25) Cash
PSC 4,000 shs
TSE
P4,650,000 P10,600,000 5,400,000 10,600,000 1,400,000 10,600,000 5,400,000 10,600,000 5,400,000 10,480,000
100,000 20,000 80,000 40,000
OSC 14,000 shs
d. Ordinary Share Capital, P20 par Ordinary Share Capital, P5 par PSC 4,000 shs OSC 40,000 shs
200,000 200,000...