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Assignment#4

The document contains information about various share capital transactions of a company including: 1) Issuance of ordinary and preference shares for cash, land, buildings, and other assets. 2) Redemption of preference shares for cash. 3) Purchase and sale of treasury shares for cash. 4) Calculation of total shareholders' equity after transactions and accounting for retained earnings, dividends, and profit. The document provides accounting entries for the share transactions according to accounting standards.

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Kristine Esplana Toralde
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82 views

Assignment#4

The document contains information about various share capital transactions of a company including: 1) Issuance of ordinary and preference shares for cash, land, buildings, and other assets. 2) Redemption of preference shares for cash. 3) Purchase and sale of treasury shares for cash. 4) Calculation of total shareholders' equity after transactions and accounting for retained earnings, dividends, and profit. The document provides accounting entries for the share transactions according to accounting standards.

Uploaded by

Kristine Esplana Toralde
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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TORALDE, MA.KRISTINE E.

CBET-01-501E

2-1

 Cash (20,000 x P500) P 10,000,000


Ordinary Share Capital P10,000,000

 Legal Expense 180,000


Ordinary Share Capital (300 x P500) 150,000
Share Premium - ordinary 30,000

 Land 5,000,000
Building 3,000,000
Ordinary Share Capital (12,500 x P500) 6,250,000
Share Premium - ordinary 1,750,000

 Cash (6,500 x P550) 3,575,000


Ordinary Share Capital (6,500 x P500) 3,250,000
Share Premium - ordinary 325,000

 Cash (20,000 x P550 x 25%) 2,750,000


Subscription Receivable (11M x 75%) 8,250,000
Subscribed Ordinary Share Capital (20,000 x P500) 10,000,000
Share Premium - ordinary 1,000,000

 Cash (12,000 x P550 x 75%) 4,950,000


Subscription Receivable 4,950,000

 Subscribed Ordinary Share Capital (12,000 x P500) 6,000,000


Ordinary Share Capital 6,000,000

2-2
a) Cash (10,000 x P200) P2,000,000
Ordinary Share Capital (10,000 x P150) P1,500,000
Share Premium – ordinary 500,000

Share Premium – ordinary 60,000


Cash 60,000

b) Land (3,500 x P560) 1,960,000


Ordinary Share Capital (3,500 x 200) 700,000
Share Premium 1,260,000
c) Cash 18,000,000
Ordinary Share Capital (100,000 x P100) 10,000,000
Share Premium – ordinary 3,500,000
Preference Share Capital (5,000 x P500) 2,500,000
Share Premium – preference 2,000,000

Allocation:
Class Total Fair Values Allocated
Ordinary (100,000 x 120) 12,000,000 13,500,000 (18M x 12/16)
Preference (5,000 x 800) 4,000,000 4,500,000 (18M x 4/16)
16,000,000 18,000,000

d) Cash (5,000 x P120 x 25%) 150,000


Subscription Receivable 450,000
Subscribed Ordinary Share Capital (5,000 x P100) 500,000
Share Premium – ordinary 100,000

e) Land 5,000,000
Cash 40,000
Donated Capital 4,960,000

2-3

Ordinary Share Capital P 380,000


Preference Share Capital 1,500,000
Subscribed Ordinary Share Capital (10,000 x P16) 160,000
Treasure Shares (1,000 x P18) ( 18,000)
Retained Earnings 350,000
Total Shareholders’ Equity P 2,372,000

2-4

a) (1) Treasury Shares (10,000 x P14) P 140,000


Cash P140,000

(2) Cash (4,000 x P15) 60,000


Treasury Shares (4,000 x P14) 56,000
Share Premium –treasury shares 4,000

(3) Cash (5,000 x P13) 65,000


Share Premium – treasury shares 4,000
Retained Earnings 1,000
Treasury Shares 70,000
(4) Ordinary Share Capital (1,000 x P10) 10,000
Share Premium – ordinary (1,000/100,000 x P300,000) 3,000
Retained Earnings 1,000
Treasury Shares (1,000 x P14) 14,000

b) Total Shareholders’ Equity, December 31, 2019


Ordinary Share Capital, P10 par P 1,000,000
Share Premium 300,000
Retained Earnings 900,000 P 2,200,000

Treasury Share transactions took place in 2020:


Treasury Shares (140,000)
Sale of Treasury Shares (4,000 x P15) 60,000
Sale of Treasury Shares (5,000 x P13) 65,000
Profit for the year 280,000
Cash Dividends Declared (200,000)
Total Shareholders’ Equity, December 31, 2020 P 2,265,000

2-5

(a) Preference Share Capital (4,000 x P20) P80,000


Share Premium – preference (4,000/100,000 x P160,000) 6,400
Paid in Capital from Retirement of Preference Shares P2,400
Cash (4,000 x P21) 84,000

(b) Preference Share Capital (4,000 x P20) 80,000


Share Premium – preference (4,000/100,000 x P160,000) 6,400
Retained Earnings 17,600
Cash (4,000 x P26) 104,000

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