On December 27, 2019, ABC Corporation issued 5,000 shares of 10% cumulative, P 100 par value preference share for P 600,000. Each preference share carried one detachable share warrant which entitles the holder to acquire at P 35, one share of ABC's P 20 par ordinary share capital. On December 27,2019, the fair value of the preference shares without warrants was P 115 and the fair value of the share warrants was P 5 per share warrant. What is the amount credited to Share Premium- Preference on the issuance of the securities? P 100,000 P 25,000 P 75,000 P 40,000

On December 27, 2019, ABC Corporation issued 5,000 shares of 10% cumulative, P 100 par value preference share for P 600,000. Each preference share carried one detachable share warrant which entitles the holder to acquire at P 35, one share of ABC's P 20 par ordinary share capital. On December 27,2019, the fair value of the preference shares without warrants was P 115 and the fair value of the share warrants was P 5 per share warrant. What is the amount credited to Share Premium- Preference on the issuance of the securities? P 100,000 P 25,000 P 75,000 P 40,000

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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On 1 January 2019, Happy Bhd acquired 75% of the ordinary shares and 30% of thepreference shares of Lucky Bhd. The preference shares are classified as equity andthey carry a cumulative preference dividend of 10% per year. The payment ofdividend is discretionary and conditional on the company achieving sufficient profitsin each year. Dividends on ordinary shares can only be paid after all arrears ofpreference dividends have been paid. For the year ended 31 December 2021, LuckyBhd reported a profit after tax of RM70 million. Its equity consists of the followingcomponents: Cumulative preference shares of 100 million units 100,000Ordinary shares of 200,000 units 200,000Retained profits brought forward 80,000Profit after tax for year ended 2021 70,000Total 450,000 Required:(a) Compute the amount of…