1. Compute for the share capital to be reported in the 2020 Statement of Financial Position.2. Compute for the share premium related with the 2020 transactions.3. Determine the balance of the treasury shares for the year 2020. The shareholders' equity section of RED COMPANY, after its initial year of operation in 2020 shows the following:DATEPARTICULARS1-Jan Issued 6,000 shares at par of Php 100 in exchange for Php 300,000, authorized 20,000 shares15-Jan Sold 8,000 shares at Php 12010-Mar Purchased 800 RED SHARES at Php 15015-May Loss on sale of machinery - Php 40,00010-Jun Sold 400 treasury shares - Php 68,00031-Dec Cash dividends declared, payable January 15, 2021 - Php 80,00031-Dec Profit for the year - Php 316,000

When company issues shares, then par value of shares will be credited to share capital account.…

Answered: 1. Compute for the share capital to be…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Compute for the share capital to be reported in the 2020 Statement of Financial Position.
2. Compute for the share premium related with the 2020 transactions.
3. Determine the balance of the treasury shares for the year 2020.

The shareholders' equity section of RED COMPANY, after its initial year of operation in 2020 shows the following:
DATE
PARTICULARS
1-Jan Issued 6,000 shares at par of Php 100 in exchange for Php 300,000, authorized 20,000 shares
15-Jan Sold 8,000 shares at Php 120
10-Mar Purchased 800 RED SHARES at Php 150
15-May Loss on sale of machinery - Php 40,000
10-Jun Sold 400 treasury shares - Php 68,000
31-Dec Cash dividends declared, payable January 15, 2021 - Php 80,000
31-Dec Profit for the year - Php 316,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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