Baria, ANNE Marie D - practice problems PDF

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BARIA, ANNE MARIE D. CBET-01-502E Chapter 2 - Shareholders’ Equity Problems: 2-1 Cash (20,000x500) Ordinary share capital Legal expense/Professional fees Ordinary share capital (300x500) Share premium ordinary

10,000,000 10,000,000 180,000 150,000 30,000

Land Building Ordinary share capital (12,500x500) Share premium ordinary

5,000,000 3,000,000

Cash (6,500x550) Ordinary share capital (6,500x500) Share premium ordinary

3,575,000

Cash (20,000x550x25%) Subscription receivable–ordinary (11Mx75%) Subscribed ordinary share (20,000x500) Share premium–ordinary

2,750,000 8,250,000

6,250,000 1,750,000

3,250,000 325,000

10,000,000 1,000,000

Cash (12,000x550x75%) Subscription receivable–ordinary

4,950,000

Subscribed ordinary share (12,000x500) Ordinary share capital

6,000,000

4,950,000

6,000,000

2-2 a. Cash (10,000x200) Ordinary share capital (10,000x150) Share premium ordinary Share premium ordinary Legal Expense Cash b. Land (3,500x560) Ordinary share capital (3,500x200) Share premium – ordinary

2,000,000 1,500,000 500,000 60,000 25,000 85,000 1,960,000 700,000 1,260,000

c. Cash

18,000,000 Preference share capital (5,000x500) Ordinary share capital (100,000x100) Share premium – preference Share premium – ordinary MV: Pref– 5,000x800=4M Ord– 100,000x120=12M Allocation: Pref:18Mx4/16=4.5M Ord:18Mx12/16=13.5M

d. Cash Subscription receivable Subscribed ordinary share Share premium – ordinary e. Land

2,500,000 10,000,000 2,000,000 3,500,000

150,000 450,000 500,000 100,000 5,000,000

Cash Donated capital

40,000 4,960,000

2-3 Issue of 30,000 ordinary shares Issue of preference shares in exchange of equipment Subscriptions for 10,000 ordinary shares at 16 Purchase of 1,000 treasury shares at 18 Retained earnings

P380,000 1,500,000 160,000 (18,000) 350,000 ----------------P2,372,000

Total shareholders’ equity,December 31, 2020

2-4 (a) 1. Treasury shares Cash 2. Cash

140,000 140,000 60,000

Treasury shares Paid in capital from treasury share 3. Cash Paid in capital from treasury shares Retained earnings Treasury shares

56,000 4,000 65,000 4,000 1,000 70,000

4. Ordinary share capital Share premium – ordinary Retained earnings Treasury shares

10,000 3,000 1,000 14,000

(b) Total shareholders’ equity,December 31, 2019 1. Purchase of treasury shares(10,000x14) 2. Sale of treasury shares (4,000x15) 3. Sale of treasury shares (5,000x13) Profit for the year Dividends declared Total shareholders’ equity, December 31,2020

P2,200,000 (140,000) 60,000 65,000 280,000 (200,000) ----------------P2,265,000

2-5 (a) Preference share capital (4,000x20) Share premium – preference (4,000x1.60) PIC from retirement of preference shares Cash (4,000x21)

80,000 6,400 2,400 84,000

(b) Preference share capital (4,000x20) Share premium – preference (4,000x1.60) Retained earnings Cash (4,000x26)

80,000 6,400 17,600 104,000...