Blazing Red Corporation is a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:EXERCISE 3
The Blazing Red Corporation is authorized to issue 100,000 P 10 par value ordinary shares and 30,000 10%
cumulative and non-participating PI00 par preference shares. The corporation engaged in the following share
capital transactions through December 31,2020:
30,000 ordinary shares were issued for P 380,000 and 12,000 preference shares for an equipment valued at P
1,500,000.
Subscriptions for 10,000 ordinary shares have been taken and 40% of the subscription price of P 16 per share
has been collected. The shares will be issued upon collection of the subscription price in full.
• 1,000 ordinary treasury shares were purchased for P 18.
Collected the balance on the subscription of 8,000 shares above and share certificates were accordingly
issued. Subscribers on 2,000 shares defaulted and the shares were declared delinquent. Blazing Red paid P
2,000 cost for advertising the delinquent shares.
Received bids on the delinquent shares. The amount due from the highest bidder was collected and the shares
were issued.
• The retained earnings balance on December 31,2020 is P 350,000.
REQUIRED:
Total Shareholder's Equity of Blazing Red Corporation as at December 31,2020.
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