On March 2, 2022, Gumamela Corporation issued 4,000 shares of 6% cumulative P100 par value preference share for P440,000. Each share carried one non-detachable warrant which entitled the holder to acquire at P17, one share of Gumamela P10 par ordinary share. On March 2, 2021, the market price of the preference share (without warrants) was P104 per share and the market price of the share warrants was P5 per warrant. The amount credited to share warrants outstanding by Gumamela on the issuance of the share was: Group of answer choices P14,000 P62,000 P24,000 P20,000

On March 2, 2022, Gumamela Corporation issued 4,000 shares of 6% cumulative P100 par value preference share for P440,000. Each share carried one non-detachable warrant which entitled the holder to acquire at P17, one share of Gumamela P10 par ordinary share. On March 2, 2021, the market price of the preference share (without warrants) was P104 per share and the market price of the share warrants was P5 per warrant. The amount credited to share warrants outstanding by Gumamela on the issuance of the share was: Group of answer choices P14,000 P62,000 P24,000 P20,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 21E: On July 2, 2018, McGraw Corporation issued 500,000 of convertible bonds. Each 1,000 bond could be...

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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P14,000

P62,000

P24,000

P20,000

Definition Definition Type of stock which is granted priority over dividend distributions as compared to common stockholders. Preferred stocks also do not carry any voting rights. Notably, in a case where a company is going to be liquidated, preferred stockholders have a priority claim on the value of assets of the company as quoted in the balance sheet, as compared to the common stockholders.

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oblem 16-11 (IAA) On July 1, 2021, Queen Company purchased for P2,400,000. 50,000 newly issued 6% cumulative P20 par value preference shares. Each preference share had one share warrant attached which entitled the holder to acquire at P15 one ordinary share of P10 par value for each two warrants held. The market price on this date of the preference share without warrant was P50 and the market price of the share warrant was P10. On December 1, 2021, all the share warrants wre sold for P700,000. 1. What amount should be recorded as cost of the investment in preference shares? a. 2,400,000 b. 2,000,000 с. 1,200,000 d. 1,000,000 2. What amount should be recognized as gain on sale of warrants? a. 300,000 b. 700,000 с. 400,000 d. 0. Question Please provide an explanation to the answers. Thank you. fullscreenExpand Transcribed Image Text Problem 16-11 (IAA) On July 1, 2021, Queen Company purchased for P2,400,000. 50,000 newly issued 6% cumulative P20 par value…