On July 1, 2021, VISION Company issued rights to shareholders to subscribe to additional shares of its ordinary share capital. One right was issued for each share owned. A shareholder could purchase one additional share for five rights plus ₱150 cash. The rights expire on September 30, 2021. On July 1, 2021, the market price of a share with the right attached was ₱200, while the market price of the right alone was ₱15. The equity on June 30, 2021 comprised the following: Ordinary share capital, ₱100 par, 50,000 shares issued and outstanding - ₱5,000,000; Share premium - ₱1,000,000; Retained earnings - ₱2,000,000. What is the total contributed capital assuming all share rights are exercised by the shareholders? a. ₱ 8,000,000 b. ₱ 9,500,000 c. ₱ 6,000,000 d. ₱ 7,500,000
On July 1, 2021, VISION Company issued rights to shareholders to subscribe to additional shares of its ordinary share capital. One right was issued for each share owned. A shareholder could purchase one additional share for five rights plus ₱150 cash. The rights expire on September 30, 2021. On July 1, 2021, the market price of a share with the right attached was ₱200, while the market price of the right alone was ₱15. The equity on June 30, 2021 comprised the following: Ordinary share capital, ₱100 par, 50,000 shares issued and outstanding - ₱5,000,000; Share premium - ₱1,000,000; Retained earnings - ₱2,000,000. What is the total contributed capital assuming all share rights are exercised by the shareholders? a. ₱ 8,000,000 b. ₱ 9,500,000 c. ₱ 6,000,000 d. ₱ 7,500,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- On July 1, 2021, VISION Company issued rights to shareholders to subscribe to additional shares of its ordinary share capital. One right was issued for each share owned. A shareholder could purchase one additional share for five rights plus ₱150 cash. The rights expire on September 30, 2021. On July 1, 2021, the market price of a share with the right attached was ₱200, while the market price of the right alone was ₱15. The equity on June 30, 2021 comprised the following: Ordinary share capital, ₱100 par, 50,000 shares issued and outstanding - ₱5,000,000; Share premium - ₱1,000,000;
Retained earnings - ₱2,000,000. What is the total contributed capital assuming all share rights are exercised by the shareholders?
a. ₱ 8,000,000
b. ₱ 9,500,000
c. ₱ 6,000,000
d. ₱ 7,500,000
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