Field Company's stockholders' equity account balances at December 31, 2006, were as follows: Common stock Additional paid in capital Retained earnings The following 2007 transactions and other information relate to the stockholders' equity accounts: Field had 400,000 authorized shares of P5 par common stock, of which 300,000 shares were issued and outstanding. On March 5, Field acquired 50,000 shares of its common stock for P10 per share to be held as treasury stock. The shares were originally issued at P15 per share, Field uses the cost method to account for treasury stock. On July 15, Field declared and distributed a property dividend of inventory. The inventory had a P750,000 carrying value and a P600,000 fair market value. On January 2, Field granted stock options to employees to purchase 20,000 shares of Field's common stock at P20 per share, which was the market price on that date. The options may be exercised within a 2 year period beginning January 2, 2007. The measurement date is the same as the grant date. On October 1, 2007, employees exercised all 20,000 options when the market value of the stock was P25 per share. Field issued new shares to settle the transaction. Field's net income for 2007 was P2,500,000. Field Company should report total stockholders' equity on December 31, 2007 at: 1,500,000 3,000,000 2,000,000 (a) P8,150,000 P8.250.000 (c) P7,900,000 (d) (b) P8,300,000
Field Company's stockholders' equity account balances at December 31, 2006, were as follows: Common stock Additional paid in capital Retained earnings The following 2007 transactions and other information relate to the stockholders' equity accounts: Field had 400,000 authorized shares of P5 par common stock, of which 300,000 shares were issued and outstanding. On March 5, Field acquired 50,000 shares of its common stock for P10 per share to be held as treasury stock. The shares were originally issued at P15 per share, Field uses the cost method to account for treasury stock. On July 15, Field declared and distributed a property dividend of inventory. The inventory had a P750,000 carrying value and a P600,000 fair market value. On January 2, Field granted stock options to employees to purchase 20,000 shares of Field's common stock at P20 per share, which was the market price on that date. The options may be exercised within a 2 year period beginning January 2, 2007. The measurement date is the same as the grant date. On October 1, 2007, employees exercised all 20,000 options when the market value of the stock was P25 per share. Field issued new shares to settle the transaction. Field's net income for 2007 was P2,500,000. Field Company should report total stockholders' equity on December 31, 2007 at: 1,500,000 3,000,000 2,000,000 (a) P8,150,000 P8.250.000 (c) P7,900,000 (d) (b) P8,300,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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most possible answer is 8,300,000
Please show solution in good accounting form
Transcribed Image Text:.Field Company's stockholders' equity account balances at December 31, 2006,
were as follows:
Common stock
1,500,000
3,000,000
Additional paid in capital
Retained earnings
The following 2007 transactions and other information relate to the stockholders'
equity accounts:
Field had 400,000 authorized shares of P5 par common stock, of which 300,000
shares were issued and outstanding. On March 5, Field acquired 50,000 shares of
its common stock for P10 per share to be held as treasury stock. The shares
were originally issued at P15 per share, Field uses the cost method to account for
treasury stock. On July 15, Field declared and distributed a property dividend of
inventory. The inventory had a P750,000 carrying value and a P600,000 fair
market value. On January 2, Field granted stock options to employees to
purchase 20,000 shares of Field's common stock at P20 per share, which was the
market price on that date. The options may be exercised within a 2 year period
beginning January 2, 2007. The measurement date is the same as the grant
date. On October 1, 2007, employees exercised all 20,000 options when the
market value of the stock was P25 per share. Field issued new shares to settle
the transaction. Field's net income for 2007 was P2,500,000.
Field Company should report total stockholders' equity on December 31,
2007 at:
2,000,000
(a) P8,150,000
P8,250,000
(c) P7,900,000
(b) P8,300,000
(d)
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