In 2020, Caroline Company issued for P105 per share, 8,000 shares of P100 par value convertible preference share capital. One preference share can be converted into three ordinary shares of Caroline’s P25 par value at the option of the shareholder. In August 2021, all the preference shares were converted into ordinary shares. The market value of the ordinary share on the date of conversion was P30 per share. What amount should be credited to share premium as a result of the issuance of the preference shares and its subsequent conversion into ordinary shares?

In 2020, Caroline Company issued for P105 per share, 8,000 shares of P100 par value convertible preference share capital. One preference share can be converted into three ordinary shares of Caroline’s P25 par value at the option of the shareholder. In August 2021, all the preference shares were converted into ordinary shares. The market value of the ordinary share on the date of conversion was P30 per share. What amount should be credited to share premium as a result of the issuance of the preference shares and its subsequent conversion into ordinary shares?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 5MC

See similar textbooks

Similar questions

Mills Company had five convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight-line method) and dividends on each security during 2019. Each convertible security is described in the following table. The corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which the securities would be included in the diluted earnings per share computations.
During 2021, Lamb Company issued 10,000 shares of P100 par value convertible preference share for P110 per share. One preference share can be converted into 3 shares of Lamb’s P25 par ordinary share at the option of the preference shareholder. On December 31, 2021, when the market value of the ordinary share was P40, the entire preference share was converted. How much should Lamb credit to Share premium as a result of the conversion?
In 2019, Blue Corporation issued 15,000 shares for P 110 per share of P 100 par convertible Preference share. One share of Preference share may be converted into three shares of P 25 par Ordinary share at the option of the Preference shareholder. On December 31, 2019, all of the Preference shares were converted into Ordinary shares. The market value of the Ordinary share at the conversion date was P 40 per share. a. How many shares of Ordinary share capital were issued at the conversion date? * b. in the preparing the journal entry for this transaction, is there an indicated gain or an indicated loss? c. how much is the indicated gain (loss)? If your answer is an indicated loss, put a parenthesis. * d. in the preparing the journal entry for this transaction, how much will be credited to Ordinary Share Capital? *
During 2019, ABC Co. issued 10,000 shares of P100 par value convertible preference shares for P110 per share. One preference share can be converted into three shares of ABC Co.’s P25 par ordinary share at the option of preference shareholder. On December 31, 2019, when the market value of the ordinary share was P40, the entire preference share was converted. How much should ABC Co. credit to share premium as a result of the conversion? * P0 P100,000 P350,000 P450,000 answer not given
In 2019, Blue Corporation issued 15,000 shares for P 110 per share of P 100 par convertible Preference share. One share of Preference share may be converted into three shares of P 25 par Ordinary share at the option of the Preference shareholder. On December 31, 2019, all of the Preference shares were converted into Ordinary shares. The market value of the Ordinary share at the conversion date was P 40 per share. How many shares of Ordinary share capital were issued at the conversion date?Using data , in the preparing the journal entry for this transaction, is there an indicated gain or an indicated loss?Using data , how much is the indicated gain (loss)? If the answer is an indicated loss, put a parenthesis.Using data, in the preparing the journal entry for this transaction, how much will be credited to Ordinary Share Capital?
During 2019, ABC Company issued 50,000, P100 par value convertible preferenceshares for P120 per share. One preference share can be converted into three ordinaryshares at P50 par value. on December 31, 2019, when the market value of theordinary shares was P60, all of the preference shares were converted. What amountshould be debited to retained earnings as a result of the conversion?
On March 1, 2019, Mall Co. issued 60,000, P50 par value, ordinary shares and 20,000, P100 par value, preference shares for a total consideration of P7,500,000. At this date, the ordinary share was selling for P100 per share and the preference share was selling for P150 per share. What amount of the proceeds should be allocated to the preference shares?
On 1 June 2021, Double Tree Bhd. Issues RM7 million 7% redeemable preference shares at RM1 each, redeemable at a premium of 10% on 31 May 2024. Dividend is payable on paid-up capital. The effective interest rate is 9.3 % and the interest is due on 31 May every year. Required: Show the extracts from the statements of profit or loss and the statements of financial position for the year 31 May 2021, where the redeemable preference share is measured at amortised cost
XYZ plc had an issued share capital of 1 million ordinary shares at 1 January 2020. The nominal value was 50p and the market value £2 per share. On 30 June 2020, the company offered a 1:2 rights issue (e.g., one new share for every two shares held) at a price of 100p per share. The post-tax earnings were £3m and £4m for 2019 and 2020, respectively. Required: a) Calculate the basic EPS for XYZ plc 31 December 2020, in accordance with best accounting practice. b) What is the bonus element for shareholders?
During 2020, Nishinoya Corporation 5,000 convertible preference shares of P100 par value per share for P 110 per share. One Preference share can be converted into three Ordinary shares of P 25 par value at the option of the preference shareholder. On December 31, 2020, when the market value of the Ordinary share was P40 per share, all of the Preference shares were converted. How much is the indicated gain(loss) as a result of the conversion?
On March 1, 2021, Riza Corp. issued 1,000 shares of its P20 par value ordinary share and 2,000 shares of its P20 par value convertible preference share for a total of P80,000. At this date, Riza ordinary share was selling for P36 per share, and the convertible preference share was selling for P27 per share. What amount of the proceeds should be allocated to Riza's convertible preference share?
On Feb. 1, 2019, Patag Corp. issued 5,000 shares of P100 par convertible preference shares for P110 per share. One share of preference shares can be converted into 2 shares of Patag Corp's P10 par value ordinary shares at the option of the preference shareholder. On Dec. 31, 2020, when the market value was P40 per share, all of the preference shares was converted. 6. What amount should be credited to share premium-preference on Feb. 1, 2019? a. P500,000 b. P125,000 C. P50,000 d. -0-