Provide complete solution: ABC Company issued 1,000 shares with P5 par to XYZ Company as compensation for 1,000 hours of legal services performed. XYZ Company usually bills P150 per hour for legal services. On the date of issuance, the share was trading on a public exchange at P140. By what amount should the share premium account increase as a result of the transaction? A. P 160,000 B. P 145,000 C. P 135,000 D. P 155,000
Provide complete solution: ABC Company issued 1,000 shares with P5 par to XYZ Company as compensation for 1,000 hours of legal services performed. XYZ Company usually bills P150 per hour for legal services. On the date of issuance, the share was trading on a public exchange at P140. By what amount should the share premium account increase as a result of the transaction? A. P 160,000 B. P 145,000 C. P 135,000 D. P 155,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Provide complete solution:
ABC Company issued 1,000 shares with P5 par to XYZ Company as compensation for 1,000 hours of legal services performed. XYZ Company usually bills P150 per hour for legal services. On the date of issuance, the share was trading on a public exchange at P140. By what amount should the share premium account increase as a result of the transaction?
A. P 160,000
B. P 145,000
C. P 135,000
D. P 155,000
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