On January 1, 2021, Penn Company began operations bu issuing at P15 per share one-half of the 950,000 ordina shares of P10 par value that had been authorized for sale In addition, the entity had 500,000 authorized preference shares of P6 par value. issuing at P15 per share one-half of the 950,000 ordinary During 2021, the entity had P1,025,000 of net income and declared P230,000 of dividend. During 2022, the entity had the following transactions: • Issued 100,000 ordinary shares for P17 per share. Issued 150,000 preference shares for P8 per share. * Authorized the purchase of a custom-made machine to be delivered in January 2023. The entity restricted P300,000 of retained earnings for the purchase of the machine. * Issued additional 50,000 preference shares for P9 per share. * Reported P1,216,000 of net income and declared on December 31, 2022 a cash dividend of P635,000 to shareholders of record on January 15, 2023 to be paid on February 1, 2023. 1. What amount should be reported as shareholders' equity on December 31, 2021? a. 7,920,000 b. 7,125,000 e. 8,150,000 d. 8,380,000 2. What amount should be reported as shareholders' equity on December 31, 2022? a. 11,850,000 b. 11,550,000 e. 12,485,000 d. 10,635,000