Durham Company had two classes of shares outstanding, 10% P100 par preference share capital and P10 par ordinary share capital. During the fiscal year ending June 30, 2022, the entity had the following transactions affecting shareholders' equity: Issue of preference shares Issue of ordinary shares Retirement of preference shares Purchase of treasury ordinary shares Share split, par value reduced to P5 Reissue of treasury ordinary shares Number of Shares 5,000 20,000 1,000 5,000 2 for 1 5,000 Price per Share 140 70 150 80 52 The balances of the accounts in the shareholders' equity on June 30, 2021 were: Preference share capital, 30,000 shares, P3,000,000; Ordinary share capital, 100,000 shares, P1,000,000; Preference share premium, P1,200,000; Ordinary share premium, P8,000,000; and Retained earnings, P2,550,000. Dividends were paid at the end of the current fiscal year on the ordinary shares at P6 per share and on the preference shares at the preference rate. Net income for the year is P750,000. 8. What amount should be reported as additional paid in capital on June 30, 2022? a. 10,620,000 b. 10,600,000 c. 9,200,000 d. 2,620,000 9. What amount should be reported as retained earnings on June 30, 2022? a. 3,300,000 b. 1,540,000 c. 1,560,000 d. 1,550,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Durham Company had two classes of shares outstanding, 10% P100 par preference share capital and P10 par ordinary share capital. During the fiscal year ending June 30, 2022, the entity had the following transactions affecting shareholders’ equity:

 

Number of Shares

Price per Share

Issue of preference shares

5,000

140

Issue of ordinary shares

20,000

70

Retirement of preference shares

1,000

150

Purchase of treasury ordinary shares

5,000

80

Share split , par value reduced to P5

2 for 1

 

Reissue of treasury ordinary shares

5,000

52

The balances of the accounts in the shareholders’ equity on June 30, 2021 were: Preference share capital, 30,000 shares, P3,000,000; Ordinary share capital, 100,000 shares, P1,000,000; Preference share premium, P1,200,000; Ordinary share premium, P8,000,000; and Retained earnings, P2,550,000. Dividends were paid at the end of the current fiscal year on the ordinary shares at P6 per share and on the preference shares at the preference rate. Net income for the year is P750,000.

  1. What amount should be reported as additional paid in capital on June 30, 2022?

10,620,000

10,600,000

9,200,000

2,620,000

What amount should be reported as retained earnings on June 30, 2022? 

3,300,000

1,540,000

1,560,000

1,550,000

 

Please kindly show solution for two question.

Durham Company had two classes of shares outstanding, 10% P100 par preference share capital and
P10 par ordinary share capital. During the fiscal year ending June 30, 2022, the entity had the following
transactions affecting shareholders' equity:
Issue of preference shares
Issue of ordinary shares
Retirement of preference shares
Purchase of treasury ordinary shares
Share split, par value reduced to P5
Reissue of treasury ordinary shares
Number of Shares
5,000
20,000
1,000
5,000
2 for 1
5,000
Price per Share
140
70
150
80
52
The balances of the accounts in the shareholders' equity on June 30, 2021 were: Preference share
capital, 30,000 shares, P3,000,000; Ordinary share capital, 100,000 shares, P1,000,000; Preference share
premium, P1,200,000; Ordinary share premium, P8,000,000; and Retained earnings, P2,550,000.
Dividends were paid at the end of the current fiscal year on the ordinary shares at P6 per share and on
the preference shares at the preference rate. Net income for the year is P750,000.
8. What amount should be reported as additional paid in capital on June 30, 2022?
a. 10,620,000
b. 10,600,000
c.
9,200,000
d. 2,620,000
9. What amount should be reported as retained earnings on June 30, 2022?
a. 3,300,000
b. 1,540,000
c. 1,560,000
d. 1,550,000
Transcribed Image Text:Durham Company had two classes of shares outstanding, 10% P100 par preference share capital and P10 par ordinary share capital. During the fiscal year ending June 30, 2022, the entity had the following transactions affecting shareholders' equity: Issue of preference shares Issue of ordinary shares Retirement of preference shares Purchase of treasury ordinary shares Share split, par value reduced to P5 Reissue of treasury ordinary shares Number of Shares 5,000 20,000 1,000 5,000 2 for 1 5,000 Price per Share 140 70 150 80 52 The balances of the accounts in the shareholders' equity on June 30, 2021 were: Preference share capital, 30,000 shares, P3,000,000; Ordinary share capital, 100,000 shares, P1,000,000; Preference share premium, P1,200,000; Ordinary share premium, P8,000,000; and Retained earnings, P2,550,000. Dividends were paid at the end of the current fiscal year on the ordinary shares at P6 per share and on the preference shares at the preference rate. Net income for the year is P750,000. 8. What amount should be reported as additional paid in capital on June 30, 2022? a. 10,620,000 b. 10,600,000 c. 9,200,000 d. 2,620,000 9. What amount should be reported as retained earnings on June 30, 2022? a. 3,300,000 b. 1,540,000 c. 1,560,000 d. 1,550,000
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