On December 31, 2022, Funny retired 20,000 shares of P30 par value ordinary shares held in treasury at an average cost of P80 per share. Before recording the retirement of the treasury shares, Funny had the following balances in its shareholders’ equity: Ordinary share capital (200,000 shares originally issued at P50) 6,000,000 Share premium 4,200,000 Retained earnings 5,000,000 Treasury shares, at cost 1,600,000 The total share premium also includes a gain from previous treasury share reissuance of 200,000. In its December 31, 2022, statement of financial position, what should Funny report as retained earnings?
On December 31, 2022, Funny retired 20,000 shares of P30 par value ordinary shares held in treasury at an average cost of P80 per share. Before recording the retirement of the treasury shares, Funny had the following balances in its shareholders’ equity: Ordinary share capital (200,000 shares originally issued at P50) 6,000,000 Share premium 4,200,000 Retained earnings 5,000,000 Treasury shares, at cost 1,600,000 The total share premium also includes a gain from previous treasury share reissuance of 200,000. In its December 31, 2022, statement of financial position, what should Funny report as retained earnings?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 31, 2022, Funny retired 20,000 shares of P30 par value ordinary shares held in treasury at an average cost of P80 per share. Before recording the retirement of the treasury shares, Funny had the following balances in its shareholders’ equity:
|
Ordinary share capital (200,000 shares originally issued at P50) |
6,000,000 |
|
Share premium |
4,200,000 |
|
|
5,000,000 |
|
Treasury shares, at cost |
1,600,000 |
The total share premium also includes a gain from previous treasury share reissuance of 200,000. In its December 31, 2022,
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