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Provide solutions in good accounting form. Thank you! VIOLET Company issued 7,000 convertible preference shares with ₱100 par value at ₱105 per share. One preference share can be converted into four ordinary shares with ₱20 par value at the option of the shareholder. Subsequently, all of the preference shares were converted into ordinary shares. The market value of the ordinary share on the date of conversion was ₱25. What amount should be credited to share premium - ordinary shares as a result of the subsequent conversion into ordinary shares of the issued preference shares?    a. ₱ 175,000 b. ₱ 140,000 c. ₱ 595,000 d. ₱ 35,000

Provide solutions in good accounting form. Thank you! VIOLET Company issued 7,000 convertible preference shares with ₱100 par value at ₱105 per share. One preference share can be converted into four ordinary shares with ₱20 par value at the option of the shareholder. Subsequently, all of the preference shares were converted into ordinary shares. The market value of the ordinary share on the date of conversion was ₱25. What amount should be credited to share premium - ordinary shares as a result of the subsequent conversion into ordinary shares of the issued preference shares?    a. ₱ 175,000 b. ₱ 140,000 c. ₱ 595,000 d. ₱ 35,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Provide solutions in good accounting form. Thank you!

VIOLET Company issued 7,000 convertible preference shares with ₱100 par value at ₱105 per share. One preference share can be converted into four ordinary shares with ₱20 par value at the option of the shareholder. Subsequently, all of the preference shares were converted into ordinary shares. The market value of the ordinary share on the date of conversion was ₱25. What amount should be credited to share premium - ordinary shares as a result of the subsequent conversion into ordinary shares of the issued preference shares? 
 
a. ₱ 175,000
b. ₱ 140,000
c. ₱ 595,000
d. ₱ 35,000
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