Integrity Company is a publicly held company whose shares are traded in the over-the-counter market. The shareholders’ equity accounts at December 31, 2021 had the following balances (see image below). Transactions during 2022 and other information relating to shareholders’ equity accounts were as follows: February 1: Issued 30,000 ordinary shares to AAA Company in exchange for a piece of land. On this date, the ordinary share had a market price of P20 per share. The land had a carrying value on AAA's books of P420,000 and an assessed value for property taxes of P400,000. March 1: Purchased 5,000 of its own ordinary shares to be held as treasury for P24 per share. May 10: Declared property dividend (equity investments at fair value through profit or loss) to ordinary shareholders. The investments had a carrying amount of P600,000 as of December 31, 2021 and fair values were P720,000 on May 10, 2021 (declaration date) and P736,000 on June 1, 2022 (distribution date). October 1: Reissued 2,000 treasury shares at P26. Declared a cash dividend of P5 per share to ordinary shareholders of record of November 15, 2022 and payable on November 25, 2022. Declared the required annual cash dividend on preference share for 2022. The dividend was paid on January 5, 2022. Profit for 2022 was P9,280,000. How much is the Total Shareholders’ Equity at December 31, 2022? (Please explain with solution.)

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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Integrity Company is a publicly held company whose shares are traded in the over-the-counter market. The shareholders’ equity accounts at December 31, 2021 had the following balances (see image below).

Transactions during 2022 and other information relating to shareholders’ equity accounts were as follows:

February 1: Issued 30,000 ordinary shares to AAA Company in exchange for a piece of land. On this date, the ordinary share had a market price of P20 per share. The land had a carrying value on AAA's books of P420,000 and an assessed value for property taxes of P400,000.
March 1: Purchased 5,000 of its own ordinary shares to be held as treasury for P24 per share.
May 10: Declared property dividend (equity investments at fair value through profit or loss) to ordinary shareholders. The investments had a carrying amount of P600,000 as of December 31, 2021 and fair values were P720,000 on May 10, 2021 (declaration date) and P736,000 on June 1, 2022 (distribution date).
October 1: Reissued 2,000 treasury shares at P26.
Declared a cash dividend of P5 per share to ordinary shareholders of record of November 15, 2022 and payable on November 25, 2022.
Declared the required annual cash dividend on preference share for 2022. The dividend was paid on January 5, 2022.
Profit for 2022 was P9,280,000.

How much is the Total Shareholders’ Equity at December 31, 2022? (Please explain with solution.)

Preference share capital, P100 par, 12% cumulative; 100,000
shares authorized; 40,000 shares issued and outstanding
Ordinary share capital, P10 par; 200,000 shares authorized;
150,000 shares issued and outstanding
Share premium
Accumulated profits
Total shareholders' equity
4,000,000
1,500,000
8,000,000
2,586,000
16,086,000

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