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    Solutions: D SC - Ordinary Share Premium Retained Earnings Treasury Shares

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    Queen Valle
    Gel Company was organized on January 1, 2022 with 100,000 authorized shares. Throughout 2022, Gel Company issued shares, purchased treasury shares, issued convertible bonds, and declared a share split. On December 31, 2022, the total amount of share premium that should be recognized is P2,370,000.

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    Solutions: D SC - Ordinary Share Premium Retained Earnings Treasury Shares

    Uploaded by

    Queen Valle
    3K views2 pages
    Gel Company was organized on January 1, 2022 with 100,000 authorized shares. Throughout 2022, Gel Company issued shares, purchased treasury shares, issued convertible bonds, and declared a share split. On December 31, 2022, the total amount of share premium that should be recognized is P2,370,000.

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    Original Title

    Exercise1 Financial_Accounting

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    Gel Company was organized on January 1, 2022 with 100,000 authorized shares. Throughout 2022, Gel Company issued shares, purchased treasury shares, issued convertible bonds, and declared a share split. On December 31, 2022, the total amount of share premium that should be recognized is P2,370,000.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    3K views2 pages

    Solutions: D SC - Ordinary Share Premium Retained Earnings Treasury Shares

    Uploaded by

    Queen Valle
    Gel Company was organized on January 1, 2022 with 100,000 authorized shares. Throughout 2022, Gel Company issued shares, purchased treasury shares, issued convertible bonds, and declared a share split. On December 31, 2022, the total amount of share premium that should be recognized is P2,370,000.

    Copyright:

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

    1) Gel Company was organized on January 1, 2022 with 100,000 authorized shares of P100 par value.

    January 15 Sold 30,000 shares at P150 per share.


    February 14 Issued 2,000 shares for legal services with a fair value of P300,000. The shares on this date are
    quoted at P160 per share.
    March 27 Purchased 5,000 treasury shares at a cost of P12 per share.
    October 31 Issued P4,000,000 convertible bonds at 110. The bonds are quoted at 97 without the conversion
    feature.
    November 5 Declared a 2-for-1 share split when the market value of the share was P160.
    December 17 Sold 10,000 shares at P75 per share.

    What total amount should be recognized as share premium on December 31, 2022?
    A. 1,830,000 B. 1,850,000 C. 2,390,000 D. 2,370,000

    SOLUTIONS: D
    SC – Ordinary Share Premium Retained earnings Treasury shares
    Jan. 15 3,000,000 1,500,000
    Feb. 14 200,000 100,000
    Mar. 27 60,000
    Oct. 31 520,000
    Dec. 17 500,000 250,000
    Total 2,370,000

    Use the following information for the next two (2) questions:
    Shokt Company’s adjusted balance at December 31, 2021, includes the following account balances:
    8% preference stock (preference shares), P100 par 900,000
    Common stock (ordinary shares), P3 par 500,000
    Subscribed common stock (subscribed ordinary shares) 400,000
    Subscription receivable (on ordinary shares) 150,000
    Additional paid-in capital (share premium) – common stocks 300,000
    Additional paid-in capital (share premium) – preferred stock 250,000
    Retained earnings: appropriated for uninsured earthquake losses 100,000
    Retained earnings: unappropriated 200,000
    Treasury stock at cost 70,000
    Net unrealized loss on investment measured at fair value through other comprehensive income 40,000
    Net unrealized gain on foreign currency translation adjustment 25,000
    Revaluation surplus 280,000

    2) The amount that Shokt Company should report as total stockholders’ equity in its December 31, 2021 balance sheet is
    A. 2,695,000 B. 2,775,000 C. 2,995,000 D. 2,970,000

    3) What is Shokt Company’s contributed capital?


    A. 2,200,000 B. 2,130,000 C. 2,350,000 D. 2,280,000

    ANSWER: A, A
    8% preference stock (preference shares), P100 par 900,000
    Common stock (ordinary shares), P3 par 500,000
    Subscribed common stock (subscribed ordinary shares) 400,000
    Subscription receivable (on ordinary shares) (150,000)
    Additional paid-in capital (share premium) – common stocks 300,000
    Additional paid-in capital (share premium) – preferred stock 250,000
    Retained earnings: appropriated for uninsured earthquake losses 100,000
    Retained earnings: unappropriated 200,000
    Treasury stock at cost (70,000)
    Net unrealized loss on investment measured at fair value through other comprehensive income (40,000)
    Net unrealized gain on foreign currency translation adjustment 25,000
    Revaluation surplus 280,000
    Total 2,695,000
    8% preference stock (preference shares), P100 par 900,000
    Common stock (ordinary shares), P3 par 500,000
    Subscribed common stock (subscribed ordinary shares) 400,000
    Subscription receivable (on ordinary shares) (150,000)
    Additional paid-in capital (share premium) – common stocks 300,000
    Additional paid-in capital (share premium) – preferred stock 250,000
    Total 2,200,000

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