28. On December 31, 2020, Nyza Company issued 200,000 shares of P100 par, 10% cumulative preferred stock for P25,000,000. One detachable warrant was attached to each preferred share issued. Each warrant gives the holder the right to purchase one common share with a P50 par value for P100. The market value of the warrant after the preferred stock was issued was P15. The warrants expire on December 31, 2021. On July 1, 2021, all of the warrants were exercised. On this date, the market prices were P120 for the common and P20 for the warrant. As a result of exercising the warrants, determine the net increase to stockholders’ equity.
28. On December 31, 2020, Nyza Company issued 200,000 shares of P100 par, 10% cumulative preferred stock for P25,000,000. One detachable warrant was attached to each preferred share issued. Each warrant gives the holder the right to purchase one common share with a P50 par value for P100. The market value of the warrant after the preferred stock was issued was P15. The warrants expire on December 31, 2021. On July 1, 2021, all of the warrants were exercised. On this date, the market prices were P120 for the common and P20 for the warrant. As a result of exercising the warrants, determine the net increase to stockholders’ equity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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28. On December 31, 2020, Nyza Company issued 200,000 shares of P100 par, 10% cumulative preferred stock for P25,000,000. One detachable warrant was attached to each
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