ABC Corporation was organized on Feb 01, 2021. The corporation was authorized to issue40,000 shares of 8% preference shares, P130 par value, and 150,000 shares of ordinary shares,P70 par value. Transactions for the year were asfollows:Mar 31 - Sold 45,000 shares of ordinary shares at P85 for cashApr 30 - Issued 5,000 shares of ordinary shares in exchange for an equipment with a fairmarket value of P400,000May 21 - 18,000 shares of ordinary shares were subscribed at P85 and a 60% paymentwere received.How much is the legal capital at the end of the year 2021?

Legal capital is equal to the par value of shares issued.

Answered: legal capital at the end of the year…

Business

Accounting

legal capital at the end of the year 20213

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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Question

ABC Corporation was organized on Feb 01, 2021. The corporation was authorized to issue
40,000 shares of 8% preference shares, P130 par value, and 150,000 shares of ordinary shares,
P70 par value. Transactions for the year were as
follows:
Mar 31 - Sold 45,000 shares of ordinary shares at P85 for cash
Apr 30 - Issued 5,000 shares of ordinary shares in exchange for an equipment with a fair
market value of P400,000
May 21 - 18,000 shares of ordinary shares were subscribed at P85 and a 60% payment
were received.
How much is the legal capital at the end of the year 2021?

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