On April 1,2020, ABC Corporation, a newly formed company, had the following shares issued and outstanding: Ordinary share, P 20 par ( 20,000 shares originally issued for P 60 per share) Preference share, P 50 par ( 6,000 shares originally issued for P 100 per share) As of April 1, 2020, ABC Inc.’s total legal capital and total shareholder’s equity, respectively are P 1,100,000 and P 1,800,000 P 700,000 and P 1,800,000 P 1,800,000 and P 1,800,000 P 1,800,000 and P 1,100,000

On April 1,2020, ABC Corporation, a newly formed company, had the following shares issued and outstanding: Ordinary share, P 20 par ( 20,000 shares originally issued for P 60 per share) Preference share, P 50 par ( 6,000 shares originally issued for P 100 per share) As of April 1, 2020, ABC Inc.’s total legal capital and total shareholder’s equity, respectively are P 1,100,000 and P 1,800,000 P 700,000 and P 1,800,000 P 1,800,000 and P 1,800,000 P 1,800,000 and P 1,100,000

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

On April 1,2020, ABC Corporation, a newly formed company, had the following shares issued and outstanding:

Ordinary share, P 20 par ( 20,000 shares originally issued for P 60 per share)
Preference share, P 50 par ( 6,000 shares originally issued for P 100 per share)

As of April 1, 2020, ABC Inc.’s total legal capital and total shareholder’s equity, respectively are

P 1,100,000 and P 1,800,000

P 700,000 and P 1,800,000

P 1,800,000 and P 1,800,000

P 1,800,000 and P 1,100,000

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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