On December 31, 2018, MAC Company presented the following information: Ordinary share capital, P50 par Share premium Retained earnings MAC decided to undergo quasi reorganization. As a result, the company's property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. PO P6,000,000 MAC will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. P300,000 300,000 Based on the foregoing, determine balance of share premium after the quasi reorganization O (P2,200,000) (1,200,000) P200,000

On December 31, 2018, MAC Company presented the following information: Ordinary share capital, P50 par Share premium Retained earnings MAC decided to undergo quasi reorganization. As a result, the company's property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. PO P6,000,000 MAC will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. P300,000 300,000 Based on the foregoing, determine balance of share premium after the quasi reorganization O (P2,200,000) (1,200,000) P200,000

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter16: Advanced Topics Concerning Complex Auditing Judgments

Section: Chapter Questions

Problem 55RSCQ

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On December 31, 2021, the Bobo company presented the following information: Ordinary share capital, P50 par P6,000,000 Share premium 300,000 Retained earnings (1,200,000) The company decided to undergo quasi reorganization. As a result, the company’s property, plant and equipment with cost of P8,000,000 and book value of P4,000,000 has recoverable amount of P3,000,000. Also, inventory would be written down by P300,000. The company will redeem its P50 par value ordinary shares and will issue equal number of ordinary shares with P30 par value. Based on the foregoing, determine balance of share premium after the quasi reorganization.
Glowworm Ltd went into voluntary liquidation on 30 June 2024. The statement of financial position prepared on that date is as follows. GLOWWORM LTD Statement of financial position as at 30 June 2024 Current assets Cash $ 32 000 Inventories 126 000 Accounts receivable $ 72 200 Less: Allowance for doubtful debts (8 200 ) 64 000 Non-current assets Plant and equipment 336 000 Less: Accumulated depreciation - plant and equipment (70 400 ) 265 600 Land 181 200 Shares in listed companies 104 000 Total assets 772 800 Current liabilities Accounts payable 86 400 Other payables 32 200 Non-current liabilities Mortgage on land 170 000 Debentures 300 000 Total liabilities 588 600 Net assets $ 184 200 Equity Share capital: Preference: 40 000 shares, issued at $1, fully paid 40 000 Ordinary 'A' 50 000 shares, issued at $1, fully paid 50 000 Ordinary 'B' 40 000 shares, issued at $1, called to 60c 24 000 114 000 General reserve 14 000 Retained earnings 56 200 Total equity $ 184 200 Additional…
Bolitmore Ltd went into voluntary liquidation on 30 June 2017, its summarised statement of financial position then being:Current assetsShare capital:Receivables20,000200,000 shares issued at a priceInventory176000of $10, called to $51,000,000Cash4,000200,000Less: Calls in arrears (20000 at $5)-100,000Non-current assetsLand500,000Plant220,000720,000Total assets920,000Current liabilitiesPayables20,000Total Equity900,000Net assets900,000All assets realised $200,000. Calls in arrears were fully collected. Costs of liquidation were $5000.RequiredRecord the above in the Liquidation account, the Liquidator’s Cash account and the Shareholders’ Distribution account.
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: Current Assets (net realizable value, P50,000) P 80,000 Land and Building (fair value, P240,000) 200,000 Goodwil (fair value, 0) 40,000 Total Assets P 320,000 Accounts Payable P 160,000 Mortgage Payable (secured by land & building) 200,000 Ordinary Share 100,000 Accumulated Profits (140,000) Total Liability and Equity P 320,000 What percentage of their claims are the unsecured creditors likely to get?
Sheffield Corp.has income from continuing operations of $220,000 for the year ended December 31, 2022. It also has the following items (before considering income taxes). 1. 2 An unrealized loss of $50,300 on available-for-sale securities. A gain of $37.500 on the discontinuance of a division (comprised of a $9.400 loss from operations and a $46,900 gain on disposal). Assume all items are subject to income taxes at a 15% tax rate. D SUPP
Big Corp. has been undergoing liquidation since December 1, 2020. As of July 31, 2021, the following data are available: P1,500,000 Liabilities not liquidated Liabilities to be liquidated P1,700,000 Assets acquired Assets realized P2,400,000 P2,250,000 Assets not realized P1,375,000 Liabilities assumed P2,625,000 Assets to be realized P2,750,000 Liabilities liquidated P1,750,000 Supplementary charges/debits P2,750,000 Supplementary credits P3,800,000 Answer the following questions: (answers can be repeated) Compute the ending cash balance of cash account (as of July 31, 2021) assuming that Choose... common stock and deficits are P2,750,000 and P750,000, respectively. What is the net gain/(loss) of Big Corp. from the liquidation? Choose...
Africa Company recently filed for bankruptcy. Immediately before liquidation. Africa Co. had the following statement of financial position Cash Investments at FVPL Accounts receivable Inventory Total P50,000 Accounts payable P650,000 150,000 Contributed capital 500,000 300,000 Retained eamings (150,000) 500,000 P1,000,000 Total P1,000,000 Africa had the following transactions in relation to its liquidation process • Sale of inventory amounted to P300,000. P50.000 was on account with the remainder on cash basis. The cost of merchandise sold amounted to P315,000. • Collections of receivables. P115.000. Purchase of additional inventory on account. P15,000. Paid suppliers, P350,000 Sold its investment at FVPL for P186500. including accrued interest of P1,500. Paid expenses of the trustee. P75.000. Unpaid expenses incurred amounted to P3500 Wrote-off P15.000 of its accounts receivables Required 1. How much is the net loss during the liquidation process?
Soprano Co. purchased a 90% interest in the Tenor Co. on January 1, 2020 for P600,000. Any excess of cost is attributed to goodwill. The equity balances of Tenor are as follows: 1/1/2020 12/31/2023 Common stock, P10 par 100,000 120,000 Paid in excess of par 200,000 260,000 Retained earnings 250,000 400,000 The only change in paid in capital is a result of a 20% stock dividend paid in 2022. The cost of equity conversion to bring the investment account to its December 31, 2023 balance is? ○ 135,000 ○ 114,000 ○ 207,000 ○ 162,000
When AAA Company filed for liquidation with the Securities and Exchange Commission, it prepared the following statement of financial position: P 80,000 Current Assets (net realizable value, P50,000) Land and Building (fair value, P240,000) Goodwill (fair value, 0) 200,000 40,000 Total Assets P320,000 Accounts Payable P160,000 Mortgage Payable (secured by land & building) Ordinary share Accumulated profits Total Liabilities and Equity 200,000 100,000 (140,000) P320,000 What percentage of their claims are the unsecured creditors likely to get?
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Smith Corporation has gone through bankruptcy and is ready to emerge as a reorganized entity on December 31, 2017. On this date, the company has the following assets (fair value is based on discounting the anticipated future cash flows): Book value Fair value Accounts Receivable $20000 $18000 Inventory 143000 111000 Land and buildings 250000 278000 Machinery 144000 121000 Patents 100000 125000 The company has a reorganization value of $800,000.Smith has 50,000 shares of $10 par value common stock outstanding. A deficit retained earnings balance of $670,000 also is reported. The owners will distribute 30,000 shares of this stock as part of the reorganization plan.The company’s liabilities will be settled as follows:∙ Accounts payable of $180,000 (existing at the date on which the order for relief was granted) will be settled with an 8 percent, two-year note for $35,000.∙ Accounts payable of $97,000 (incurred since the date on which the order for relief was granted)…
Sheridan Corporation has income from continuing operations of $278,000 for the year ended December 31, 2022. It also has the following items (before considering income taxes). An unrealized loss of $74,000 on available-for-sale securities. 2. Again of $25,000 on the discontinuance of a division (comprised of a $19,000 loss from operations and a $44,000 gain on disposal). Assume all items are subject to income taxes at a 15% tax rate. Prepare a partial income statement, beginning with income from continuing operations, and a statement of comprehensive income. (Enter loss using either a negativign preceding the number eg.-2,945 or parentheses e.g. (2.945)) Income from Continuing Operations Discontinued Operations Gain from Disposal, Net of Income Taxes SHERIDAN CORPORATION Income Statement (Partial) For the Year Ended December 31, 2022 Ines from nortinne Nat of Income Tay Saunas 37400 16150 278000