At the beginning of the current year, SCARLET Company's issued and outstanding shares total 100,000 shares of P10 par value, Share Premium of P400,000 and Retained Earnings of P360,000. The following transactions occurred during the year: January 10 Sold 40,000 shares at P15 per share March 27 Purchased 5,000 treasury shares at a cost of P12 per share. October 31 Issued P5,000,000 convertible bonds at 120.The bonds are quoted at 98 without the conversion feature. November 10 Declared a 2 for 1 split when the market value of the share was P16. December 15 Sold 20,000 shares at P10 per share. December 31 Net income for the year was P550,000

At the beginning of the current year, SCARLET Company's issued and outstanding shares total 100,000 shares of P10 par value, Share Premium of P400,000 and Retained Earnings of P360,000. The following transactions occurred during the year: January 10 Sold 40,000 shares at P15 per share March 27 Purchased 5,000 treasury shares at a cost of P12 per share. October 31 Issued P5,000,000 convertible bonds at 120.The bonds are quoted at 98 without the conversion feature. November 10 Declared a 2 for 1 split when the market value of the share was P16. December 15 Sold 20,000 shares at P10 per share. December 31 Net income for the year was P550,000

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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Concept explainers

Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.

Question

What is the total shareholders' equity at year-end?

At the beginning of the current year, SCARLET Company's issued and outstanding shares total 100,000 shares of P10
par value, Share Premium of P400,000 and Retained Earnings of P360,000. The following transactions occurred
during the year:
January 10
Sold 40,000 shares at P15 per share
March 27
Purchased 5,000 treasury shares at a cost of P12 per share.
October 31
Issued P5,000,000 convertible bonds at 120.The bonds are quoted at 98
without the conversion feature.
November 10
Declared a 2 for 1 split when the market value of the share was P16.
Sold 20,000 shares at P10 per share.
Net income for the year was P550,000
December 15
December 31

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