Beruflich Dokumente
Kultur Dokumente
Solution
Jan 15 Cash (650 shares x P40) 28,000
Paid-in capital from treasury share 13,000
Treasury Share 39,000
Cost of treasury share: P72,000/1,210 shares = P60 per share
Cost of shares sold: 650 shares x P60 = P 39,000
Feb 2 Cash (P90,000 x 103) 92,700
Discount on bonds payable 2,700
Bonds payable 90,000
Ordinary share warrants 5,400
Price of bonds without warrants attached: 97 x P90,000 = P87,300
Value of detached warrants: 90 x P60 = P 5,400
Because value of bonds plus value of detachable warrants is equal to the total issuance price (P87,300 +
P5,400 = P92,700), the value assigned to the bonds and warrants is the fair value of each.
Mar 6 Cash 24,640
Ordinary share subscription receivable 36,960
Ordinary share subscribed 2,800
Paid-in capital in excess of par 58,800
Mar 20 Cash 31,680
Ordinary share subscription receivable 31,680
Mar 20 Ordinary share subscribed 2,400
Ordinary share 2,400
Mar 20 Ordinary share subscribed 400
Paid-in capital in excess of par 8,400
Ordinary share subscription receivable 5,280
Paid in capital from forfeited share subscription 3,520
Nov 1 Cash (550 s P40) 22,000
Ordinary share warrants (55 x P60) 3,300
Ordinary share 1,100
1
Problem 2
1. The balance of 5% Preference Share at December 31, 2004 is:
a. P 1,500,000 b. P 1,000,000 c. P 500,000 d. P 0
Solution
July 1 Ordinary share, P30 par 3,000,000
Ordinary share, P60 stated value 1,500,000
Exchanged 100,000 shares of old ordinary share with a par value of P30 for 25,000 shares of new ordinary share with
a stated value of P60.
SHAREHOLDERS’ EQUITY
Contributed Capital
5% preference share 1,000,000
Ordinary share 6,000,000
Paid-in capital in excess of stated value – ordinary 300,000
Total 7,300,000
Retained earnings (accumulated since July 1, 2002) 243,750
Total Shareholders’ Equity 7,543,750
2
Problem 3
1. Alcain’s Ordinary share balance at December 31, 2004 is:
a. P 1,300,000 b. P 1,160,000 c. P 900,000 d. P 800,000
Solution
a. Memo entry
b. Treasury share 50,000
Cash 50,000
c. Retained earnings 75,000
Property dividends payable 75,000
d. Cash 360,000
Ordinary share 100,000
APIC 260,000
e. Income summary 240,000
Retained earnings 240,000
Problem 4
1. The total additional paid-in capital at year-end is:
a. P 881,000 b. P 877,000 c. P 922,000 d. P 934,000
Solution
Feb 1 - Land 143,000
Ordinary share 13,000
APIC – CS 130,000
Mar 1 - Treasury share 70,000
Cash 70,000
May 10 - Retained earnings 600,000
Property dividend payable 600,000
Oct 1 - Cash 32,000
Treasury share 28,000
APIC – TS 4,000
Nov 4 - Retained earnings 165,000
Cash 165,000
3
Dec 20 - Retained earnings 12,000
Dividends payable 12,000
Dec 31 - Retained earnings 14,000
Income tax payable 6,000
Patents 20,000
Dec 31 - Income summary 838,000
Retained earnings 838,000
Problem 5
1. The adjusted balance of the “Shareholders’ Equity” account of the company’s balance sheet as of December 31, 2004 is:
a. P 4.36 million b. P 4.46 million c. P 4.76 million d. P 4.91 million
2. The book value per share of the company’s share as of December 31, 2004 is
a. P 14.44 b. P 14.00 c. P 13.12 d. P 12.82
Solution
Land 2,000,000
Ordinary share 1,500,000
APIC 500,000
Cash 2,400,000
Ordinary share 2,000,000
APIC 400,000
Treasury share 300,000
Cash 300,000
Retained earnings 100,000
Loss on sale 100,000
Cash 170,000
Treasury share 150,000
APIC – TS 20,000
Retained earnings 200,000
Cash 200,000
Answer:
1. C 2. B
Problem 6
1. Total shareholders’ equity as of December 31, 2004 is:
a. P 2,035,000 b. P 5,535,000 c. P 7,500,000 d. P 9,535,600
3. The book value per share of ordinary share as of December 31, 2004 is:
a. P 203.55 b. P 187.52 c. P 172.50 d. P 165.00
Solution
1 D. Reserve for bond retirement P1,600,000
6% cumulative Preference share 1,850,000
Ordinary share 4,000,000
Premium on preference share 100,000
Premium on ordinary share 673,000
Retained earnings 1,312,600
Total shareholders’ equity P9,535,600
Less equity identified to preference share
Liquidation value (18,500 shares x P110) 2,035,000
4
3 B BV per share of ordinary share P7,500,600/ 40,000 P187.52
Problem 7
1. The total preference share at December 31, 2003 is:
a. P 600,000 b. P 625,000 c. P 651,400 d. P 667,500
Solution
2003
Treasury share 495,000
Cash 495,000
Preference share 200,000
Ordinary share 25,000
Additional paid-in capital 175,000
Subscription receivable 132,000
Cash 198,000
Subscribed ordinary share 50,000
Additional paid-in capital 280,000
Income summary 660,000
Retained earnings 660,000
2002
Cash 112,200
Subscription receivable 112,200
Subscribed ordinary share 42,500
Ordinary share 42,500
Subscribed ordinary share 7,500
Additional paid-in capital 42,000
Subscription receivable 19,800
APIC – forfeiture of share 29,700
Cash 500,000
5
Treasury share 330,000
Additional paid-in capital 170,000
Retained earnings 51,400
Preference share 51,400
Income summary 890,000
Retained earnings 890,000
Problem 8
1. The Ordinary Share balance of Calunsag Company at December 31, 2003 is:
a. P 100,500 b. P 100,000 c. P 99,500 d. P 89,500
2. The Additional paid-in capital balance of Calunsag Company at December 31, 2003 is:
a. P 1,000 b. P 500 c. P 0 d. cannot be
determined
5. The Retained Earnings – December 31, 2003 balance of Calunsag Company is:
a. P 182,500 b. P 175,000 c. P 172,500 d. P 152,500
Solution
Adj: Retained earnings 500
Additional paid-in capital 500
OE: Cash 530,000
Accum. dep’n 370,000
Retained earnings 10,000
Building 910,000
CE: Cash 530,000
Accum. dep’n 370,000
Loss on sale 10,000
Building 910,000
Adj: Loss on sale 10,000
Retained earnings 10,000
Adj: Repairs 2,000
Retained earnings 2,000
Adj: Loss on market decline 30,000
Retained earnings 30,000
Problem 9
1. By how much should the retained earnings be decreased as a result of the property dividend declaration on April 30, 2004?
a. P 950,000 b. P 920,000 c. P 910,000 d. P 0
2. How much is the total dividends declared on preference and ordinary share in 2004?
a. P 2,294,900 b. P 2,263,900 c. P 2,254,900 d. P 2,200,900
6
6. The adjusted balance of retained earnings on December 31,2004 is
a. P 2,783,600 b. P 2,774,000 c. P 2,771,600 d. P 2,743,600
Solution
Jan 6 - Land 371,250
Ordinary share 22,500
APIC 348,750
Jan 31 - Cash 1,323,000
Discount on BP 67,500
Ordinary share warrants 40,500
Bonds Payable 1,350,000
Proceeds 1,323,000
Less: Market Value of Bonds (P1,350,000 x 95%) 1,282,500
Allocated Cost of the warrants 40,500
Feb 22 - Treasury share 180,000
Cash 180,000
Feb 28 - Cash 273,000
Subscription receivable 273,000
Subscribed ordinary share 21,000
APIC 525,000
Mar 15 - Cash 234,000
Subscription receivable 234,000
Subs. ordinary share 18,000
Ordinary share 18,000
Subs. Ordinary share 3,000
APIC 75,000
Subscription receivable 39,000
APIC – forfeiture of share 39,000
Apr 30 - Dividends/RE 910,000
Inventory 910,000
Aug 30 - Cash 60,000
Retained earnings 12,000
Treasury share 72,000
Sep 14 - Cash 94,500
Ordinary share warrants 28,350
Ordinary share 9,450
APIC 113,400
Nov 30 - Dividends/RE 1,290,900
Cash 1,290,900
Dec 15 - Dividends 54,000
Dividends payable 54,000
Dec 31 - Retained earnings 20,400
Income tax payable (32%) 9,600
Patents 30,000
Income summary 1,860,900
Retained earnings 1,860,900
7
Problem 10.
1. Retained earnings, 12/31/00
a. P 860,000 b. P 850,900 c. P 790,900 d. P 760,900
Solution
2001 2002 2003
Unadjusted net income/(loss) 310,000 (205,000) (165,500)
Adjustments:
“c” – Depreciation (120,000) (120,000) (40,000)
“d” – Error in charging to expense 30,000
Depreciation (20,000) (80,000)
“e” – Understatement of inv. – 2001 64,000 (64,000)
Understatement of inv. - 2003 44,500
“f” – Understatement of inv. - 2002 43,400 (43,400)
Understatement of inv. – 2003 32,600
Under. of purchases – 2002 (43,400) 43,400
Under. of purchases – 2003 ___________ ___________ (32,600)
Adjusted Net income 254,000 (379,000) (241,000)
Plus: Retained Earnings – beg unadj. 580,000
Prior period adjustment
Error in charging to expense 360,000
Unrecorded depreciation (80,000)
Retained Earnings – beg adjusted 860,000 974,000 495,000
Less: Dividends (140,000) (100,000) _________
Retained earnings – end 974,000 495,000 254,000
Problem 11
1. What amount of money should the company pay the Treasurer?
a. P 50,000 b. P 25,000 c. P 15,000 d. P 0
Solution
Inventory 15,000
Land 20,000
Accounts receivable15,000
Cash 50,000
8
Treasury share 75,000
Inventory 15,000
Land 20,000
Accounts receivable 15,000
Cash 25,000
Retained earnings 75,000
Treasury share 75,000
Problem 12
1. Capital share issued
a. P 580,000 b. P 550,000 c. P 510,000 d. P 500,000
3. Long-term liabilities
a. P 230,000 b. P 190,800 c. P 180,000 d. P 160,000
Solution
Long-term liability 20,000
Mortgage Payable – current 20,000
9
Land 40,000
Gain on sale 8,000
APIC – TS 8,000
Beg. Inventory 4,000
Retained earnings - beg 2,800
Income tax payable 1,200
Inventory 10,000
Cost of sales 10,000
Retained earnings – beg 1,750
Income tax payable 750
Depreciation 2,000
Accum. Depreciation 4,500
Retained earnings – beg 700
Income tax payable 300
Expenses 1,000
Accrued expenses 1,600
Expenses 1,600
Loss on inventory 20,000
Loss on damages 40,000
Extraordinary items 42,000
Income tax payable 18,000
Answer:
1. D 2. A 3. D 4. B 5. D 6. P 18,350 7. P 0
8. P 96,600
Unadjusted NI 150,000
Under beg. Inv. ( 4,000)
Under ending invent. 10,000
Under depreciation ( 2,000)
Under AE – beg 1,000
Over AE – end 1,600
Loss on inventory (20,000)
Loss on damages (40,000)
Income before tax 96,600
Provision 28,980
Net income 67,620
9. P 28,980 10. A 11. P 85,970
Problem 13
1. The Retained earnings of Christian Paul Corporation at the end of 2005 is: (P in 000s)
a. P 5,276,700 b. P 5,276,600 c. P 5,112,600 d. P 5,095,850
2. The Additional paid-in capital of Christian Paul Corporation at the end of 2005 is: (P in 000s)
a. P 5,860,000 b. P 5,655,000 c. P 2,190,000 d. P 2,025,000
3. The Ordinary share of Christian Paul Corporation at the end of 2005 is: (P in 000s)
a. P 495,750 b. P 495,000 c. P 330,750 d. P 330,000
4. The total Shareholders’ Equity of Christian Paul Corporation at the end of 2005 is: (P in 000s)
a. P 11,097,450 b. P 7,797,600 c. P 7,796,700 d. P 7,615,850
Solution
(in 000’s)
A. Retained earnings 252,000
Cash 252,000
B. Retained earnings 3,900
Investment – HTM 3,900
C. Retained earnings 330,750
10
Ordinary share 15,000
APIC 300,000
Cash 15,750
D. Retained earnings 264,000
Cash 264,000
E. Retained earnings 165,000 Ordinary share, old 330,000
Ordinary share 165,000 OR Retained earnings 165,000
Ordinary share, new 495,000
F. Retained earnings 321,750
Cash 321,750
Problem 14
1. What is the balance of the ordinary share account at June 30, 2003?
a. P 2,352,000 b. P 2,350,000 c. P 2,320,500 d. P 2,320,500
2. What is the balance of the Treasury Share account at June 30, 2003?
a. P 156,000 b. P 124,800 c. P 117,000 d. P 114,000
3. What is the entry to record the dividend in arrears on the preference share?
a. Retained earnings 100,000 c. Dividend payable 100,000
Dividend payable 100,000 Cash 100,000
b. Retained earnings 100,000 d. No journal entry
Cash 100,000
Solution
Cash 5,890,000
Ordinary share 1,900,000
APIC 3,990,000
Land 440,000
Ordinary share 100,000
APIC 340,000
Cash 840,000
Ordinary share 200,000
APIC 640,000
Cash 184,000
Ordinary share 40,000
APIC 144,000
Subscription receiv. 736,000
Subscribed CS 160,000
APIC 576,000
Treasury share 156,000
Cash 156,000
Retained earnings 572,000
(110,000 + 2,000 – 2,000 x 5% x P104)
Ordinary share 110,000
APIC 462,000
Cash 42,000
Treasury share 39,000
11
APIC – TS 3,000
Cash 4,400,000 Dividends:
Preference share 2,500,000 Ordinary share
APIC – PS 1,900,000 12/15/01 110,000 x .60 = P 66,000
6/15/02 110,000 x .60 = 66,000
Retained earnings 432,000 Preference share
Cash 432,000 12/15/01 50,000 x 2 = 100,000
6/15/02 50,000 x 2 = 100,000
Income summary 80,000 12/15/02 50,000 x 2 = 100,000
Retained earnings 80,000 Total 432,000
RE – unappropriated 100,000
RE – appropriated 100,000
Problem 15
1. How much the total cash received from the sale of the P6,000,000 bonds on April 1, 1994?
a. P 6,000,000 b. P 5,680, 050 c. P 5,785,050 d. P 5,820, 050
3. How much is the carrying value of the bonds payable as of December 31, 1994?
a. P 6,311, 850 b. P 6,000,000 c. P 5,692,048 d. P 5,688,150
Solution
4/1/94 Cash 5,785,050 (squeezed figure)
Discount on BP 319,950
Bonds payable 6,000,000
Interest expense 105,000
10/1/94 Interest expense 210,000
Cash 210,000
12/31/94 Interest expense 105,000
Interest payable 105,000
Interest expense 8,100
Discount on BP 8,100
(P319,950/237 x 6 = P8,100)
4/1/04 Bonds payable 750,000
Discount on BP 20,250
APIC 579,750
6/1/04 Bonds payable 375,000
Loss on retirement 103,622
Discount on BP 9,872
Cash 468,750
12