1. Determine the amount of the ordinary share capital at the end of 2021. 2. Total share premium account by the end of December 31, 2021 is? 3.  The amount to be added/deducted to retained earnings as a result of the equity swap is?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1. Determine the amount of the ordinary share capital at the end of 2021.

2. Total share premium account by the end of December 31, 2021 is?
3.  The amount to be added/deducted to retained earnings as a result of the equity swap is?

YELLOW CORPORATION had the following balances from the 2020 transactions:
Ordinary share capital, par value Php 10, authorized 300,000 shares, issued and outstanding,
120,000 shares
1,200,000.00
Share premium
180,000.00
Retained earnings
720,000.00
The following transactions occurred during the year 2021:
1. Acquired 8,000 of its own ordinary shares for Php 144,000. YELLOW CORPORATION utilitizes cost method of accounting for
treasury shares.
2. Sold 6,500 treasury shares at Php 20 per share
3. Retired the remaining treasury shares.
4. YELLOW CORPORATION owes Php 10,000,000 to GREEN BANK. Unpaid interest on this loan has been accrued in the amount
of Php 100,000. Because YELLOW CORPORATION is in financial trouble, GREEN BANK agreed to accept from the corporation
160,000 shares that have a fair value of Php 8,000,000 in full settlement of the Php 10,000,000 obligation.
Transcribed Image Text:YELLOW CORPORATION had the following balances from the 2020 transactions: Ordinary share capital, par value Php 10, authorized 300,000 shares, issued and outstanding, 120,000 shares 1,200,000.00 Share premium 180,000.00 Retained earnings 720,000.00 The following transactions occurred during the year 2021: 1. Acquired 8,000 of its own ordinary shares for Php 144,000. YELLOW CORPORATION utilitizes cost method of accounting for treasury shares. 2. Sold 6,500 treasury shares at Php 20 per share 3. Retired the remaining treasury shares. 4. YELLOW CORPORATION owes Php 10,000,000 to GREEN BANK. Unpaid interest on this loan has been accrued in the amount of Php 100,000. Because YELLOW CORPORATION is in financial trouble, GREEN BANK agreed to accept from the corporation 160,000 shares that have a fair value of Php 8,000,000 in full settlement of the Php 10,000,000 obligation.
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