Please do not give solution in image format ? Company C which had just been created a few weeks ago decides to increase its capital by EUR15.000.000 by the issuance of 15.000 shares with a nominal value of 1.000 each.The contribution is made by a contribution in kind (CIK) which consists into a building.The Value of the building has been estimated at EUR 15.000.000 as stated in the notary deed, the reportof the independent auditor and the extraordinary shareholder meeting minutes as of 1 April 2018.Pass the accounting entry following the extraordinary shareholders meeting that the capital increase.

When a company increases its capital by issuing new shares through a contribution in kind (CIK), the…

Answered: Company C which had just been created a…

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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The authorized capital of the company was OMR 3,000,000 divided into shares of OMR 1 each. The company already had in issue 600,000 shares fully paid up. In the year 2021, the company again issued for subscription by the public 800,000 and share are fully subscribed by the public. How much amount will be the total issued capital of the company?
Shell product decided to raise additional financing by issuing common stock. The company received OMR6400 in exchange for OMR 1500 shares of OMR 1 par value common stock. By what amount should the additional paid-in capital account increase as a result of this transaction? Select one: a. OMR7900 O b. None of the options c. OMR3000 O d. OMR4900
Assume the following independent cases:A. At the beginning of the year, a check was issued for P400,000 as payment for a piece of land, and the buyer assumed the liability for the unpaid taxes at the end of the year, P10,000 and those assessed for the current year at P9,000.B. A company issued 14,000 ordinary shares (P10 par) with a market value of P60 per share (based upon a recent sale of 100 shares) for the land. The land was recently appraised at P800,000 by independent and competent appraisers.C. A company rejected an offer to purchase the land for P8,000,000 cash two years ago. Instead, the company issued 100,000 ordinary shares for the land (market value of the ordinary share, P78 each based on several recent large transactions and normal weekly stock trading volume).D. A company purchased land by signing a note with the seller, requiring P100,000 down payment, payment of P120,000 one year from purchase, and P80,000 three years from purchase. The note is non-interest bearing,…
For the current year, Spiderman Company received a donation of 3,000 shares with a par value of P20 from the shareholder. The market value of the share was P150. The shares were originally issued P50 per share. As a result of the donation, what was the decrease in the shareholder’s equity?
Hong Banjang was incorporated on January 1, 2020. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱400000.• A land and building were acquired through a lump sum payment of ₱80000. A mortgage amounting to ₱20000 was assumed on the land and building. • Total payments of ₱16000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱2000. • Additional capital of ₱40000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱12000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2020 is ₱24000.How much is the total assets as of December 31, 2020?
Melon Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the profit for the year?
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1. A company received 3,000, P10 par ordinary shares from one of its shareholders. In the same year the company reissued the shares at P15 per share. If the fair value of the shares was P13 at the date of donation, what amount was credited to the donated capital account when the shares were reissued? 2. In 2021, a company issued 6% bonds with a maturity value of P40,000, together with 1,000 shares of its P10 par value ordinary share, for a combined cash amount of P150,000. The market value of a company’s share on that date cannot be ascertained. If the bonds were issued separately, they would have been sold for P35,000 on an 8% yield to maturity basis. Determine the increase in share premium as a result of this transaction.3. In 2021, a company issued 1,000,000 no-par value ordinary shares for P1.15 per share. The stated value of the shares is P1. Also, during the year, some potential shareholders of the company subscribed for 800,000 of the same ordinary shares for P1.20 per share…
Wedding Cake Ltd. has its shares listed on a securities exchange. It has entered a contractual agreement to issue $10 million of its ordinary shares to Island Ltd. in two years time. The number of shares to be ultimately issued will depend on the market price of the shares in two years time. Should Wedding Cake Ltd. recognise a financial liability or an equity instrument in relation to this agreement?
Determine the basis of the property contributed in the hands of the corporation in each instance. Assume that the 80% rule is met in all cases. Required: a. Contribution of property with a basis of $1,800 and an FMV of $2,200. b. Contribution of property with a basis of $4,600 and an FMV of $5,400. The stockholder also received $540 cash from the corporation as part of the stock transaction. c. Contribution of property with a basis of $9,000 and an FMV of $14,100. The stockholder also received property with an FMV of $2,500 from the corporation as part of the stock transaction. d. Contribution of a building with an FMV of $240,000, a mortgage (assumed by the corporation) of $140,000, and a basis of $205,000. e. Contribution of a building with an FMV of $1,780,000, a mortgage (assumed by the corporation) of $1,080,000, and a basis of $675,000. Amount a. Corporation's basis in property b. Corporation's basis in property c. Corporation's basis in property d. Corporation's basis in…
Rainbow Berhad required funds for a feasible project which will be beneficial to both the company and its shareholders. Instead of issuing loan notes, the funding was to be through a share issue. The public was than invited to subscribe to 40,000 ordinary shares of Rainbow Berhad on the 24 January 2021. The full price of the share was RM12 each. The board of directors decided that on application RM4.50 should be paid on application, and then the applicants should pay the allotment of RM2.50 one week after the allotment. The balance of the share money will be on one call.On the 25 February 2021, application closed with the issue oversubscribed by 8,000 shares, and share issue cost was paid amounted to RM1,500. On 8 March 2021, the directors allotted the shares, and it was decided that the shares are to be allotted on a pro- rata basis. Any excess of the application money will be held by the company as part of the allotment. On 15 March 2021, all the allotment money was received.On the…
BT21 Co. was incorporated on January 1, 2021. The following were the transactions during the year:• Total consideration from share issuances amounted to ₱4,000,000.• A land and building were acquired through a lump sum payment of ₱800,000. A mortgage amounting to ₱200,000 was assumed on the land and building. • Total payments of ₱160,000 were made during the year on the mortgage assumed on the land and building. The payments are inclusive of interest amounting to ₱20,000. • Additional capital of ₱400,000 was obtained through bank loans. None of the bank loans were paid during the year. Half of the bank loans required a secondary mortgage on the land and building. • There is no accrued interest as of year-end. • Dividends declared during the year but remained unpaid amounted to ₱120,000. • No other transactions during the year affected liabilities.• Retained earnings as of December 31, 2021 is ₱240,000.How much is the profit for the year?

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