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    3rd Activity

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    dar •
    The document provides financial information for the shareholders' equity accounts of multiple companies (Lancer, Susan, Marimar, and Leilanie) on various dates. It includes transactions such as shares issued and reacquired, dividends declared, stock splits, and exercises of stock rights and warrants. The task is to compute the adjusted balances of relevant shareholders' equity accounts, such as share capital, share premium, and retained earnings, based on the information provided for each company.

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    3rd Activity

    Uploaded by

    dar •
    985 views2 pages
    The document provides financial information for the shareholders' equity accounts of multiple companies (Lancer, Susan, Marimar, and Leilanie) on various dates. It includes transactions such as shares issued and reacquired, dividends declared, stock splits, and exercises of stock rights and warrants. The task is to compute the adjusted balances of relevant shareholders' equity accounts, such as share capital, share premium, and retained earnings, based on the information provided for each company.

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    The document provides financial information for the shareholders' equity accounts of multiple companies (Lancer, Susan, Marimar, and Leilanie) on various dates. It includes transactions such as shares issued and reacquired, dividends declared, stock splits, and exercises of stock rights and warrants. The task is to compute the adjusted balances of relevant shareholders' equity accounts, such as share capital, share premium, and retained earnings, based on the information provided for each company.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    985 views2 pages

    3rd Activity

    Uploaded by

    dar •
    The document provides financial information for the shareholders' equity accounts of multiple companies (Lancer, Susan, Marimar, and Leilanie) on various dates. It includes transactions such as shares issued and reacquired, dividends declared, stock splits, and exercises of stock rights and warrants. The task is to compute the adjusted balances of relevant shareholders' equity accounts, such as share capital, share premium, and retained earnings, based on the information provided for each company.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    3RD ACTIVITY

    Lancer Company reported the following shareholders' equity:,

    Share capital, 50,000 shares, P100 par 5,000,000

    Share premium 1,000,000

    Retained earnings ( 500,000)

    Total shareholders' equity 5,500,000

    The entity wishes to cancel the deficit and is considering each of the following possibilities:

    a. Shareholders are to donate 10% of their shares to the entity and these are formally retired.

    b. The par value of shares is to be reduced to P50.

    c. Two new no-par shares are to be exchanged for each share outstanding and the legal capital for the
    entity is to be restated at P5,500,000. The stated value is P55.

    d. Three new no-par shares with a stated value of P20 are to be exchanged for every share.

    Compute for the adjusted balance:

    1. Share capital
    2. Share premium

    On May 31, 2017, the entity issued bonds of P5,000,000 at 120, giving with each P1,000 bond a warrant
    enabling the holder to purchase 3 shares at P120 per share for a one year period.

    Shares were selling for P140 at this time. The market value of bond ex-warrant is 105.

    By December 31, 2017, 10,000 shares had been issued in connection with warrants issued on the sale
    of bonds.

    Net income for 2017 was P2,000,000.

    On July 15, 2018, the entity issued rights to shareholders, 1 right on each share, permitting holders to
    acquire for a one-year period 1 share at P130 with every 5 rights submitted. Shares were selling for
    P150 at this time.

    All rights were exercised and the additional shares were issued on December 31, 2018.

    The remaining share warrants issued to the bondholders expired.

    Net income for 2018 was P3,000,000.

    3. Compute for shareholders' equity on December 31, 2018.

    Susan Company disclosed the following shareholders' equity on January 1, 2017:

    Share capital, P100 par, 100,000 shares

    authorized, 50.000 shares issued 5,000,000

    Share premium 400,000

    Retained earnings 1,500,000

    During the current year, the entity had the following

    transactions:

    A. In February, the entity reacquired 6,000 shares for P90 per share.

    B. In June, the entity sold 3,000 shares of its treasury for P120 per share.

    C. In September each shareholder was issued for each share held one stock right to purchase two
    additional shares for P140 per share. The rights expire on December 31, 2017.

    D. In October, 10,000 stock rights were exercised when the market value was P150 per share.
    E. On December 15, 2017, the entity declared the first cash dividend to shareholders of P20 per share,
    payable on January 10, 2018, to shareholders of record on December 31, 2017.

    F. On December 21, 2017; the entity formally retired 2,000 treasury shares.

    G. Net income for the current year was P540,000.

    H. Appropriated retained earnings equal to the cost of treasury shares.

    Compute for the adjusted balance:

    4. Share capital
    5. Share premium
    6. Retained Earnings

    Marimar Company reported the following shareholders' equity on January 1, 2017:

    Share capital, P100 par 6,000,000

    Share premium 500,000

    Retained earnings 1,800,000

    Transactions during the year and other information relating to shareholders' equity accounts were as
    follows:

    a. On January 26, the entity reacquired for cash 5,000 shares for P110 per share.

    b. On April 4, the entity sold for cash 3,000 shares of treasury for P140 per share.

    c. On June 1, the entity declared a cash dividend of P20 per share, payable July 5, to shareholders of
    record on July 1.

    d. On November 1, the entity declared a 2 for 1 split and changed the par value from P100 to P50. On
    November 20, shares were issued for the share split.

    e. On December 5, 4,000 shares were issued in exchange for a second hand equipment. The equipment
    originally cost P400,000, was carried by the previous owner at a carrying amount of P200,000 and was
    fairly valued at P260,000.

    f. Net income for the current year was P1,730,000.

    g. Appropriated retained earnings equal to the cost of treasury shares.

    Compute for the adjusted balance:

    7. Share capital
    8. Share premium
    9. Retained Earnings

    Leilanie Company reported the following shareholders'

    equity on January 1, 2017:

    Share capital 1,500,000

    Share premium 3,000,000

    Retained earnings 5,000,000

    The entity had 400,000 authorized shares of P5 par value, of which 300,000 shares were issued and
    outstanding. On March 1, 2017, the entity acquired 50,000 shares for P10 per share to be held as
    treasury. The shares were originally issued at P8 per share. The entity used the cost method to account
    for treasury shares. On July 1, 2017, the entity declared a property dividend of inventory payable on
    March 1, 2018.

    The inventory had a P1,200,000 carrying. amount and a fair value of P1,500,000 on July 1, 2017,
    P1,800,000 on December 31, 2017 and P2,000,000 on March 1, 2018.

    The net income for 2017 was P3,000,000.

    10. Compute for shareholders' equity on December 31, 2018.

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