Redemption of shares Redeemable shares (可贖回股份) ►Shares issued with redemption terms at a specified future date Share redemption/buy-back (0) The new Companies Ordinance allows greater flexibility for the share redemption or buy-back ▶ The payment for the redemption may be made: ▶ Out of proceeds of fresh issue of new shares ▶ Out of company's distributable profits Out of capital, following procedures prescribed in the new Companies Ordinance (New Co. Ord.) Accounting for share redemption Procedures Shares to be redeemed (say preference share capital) On redemption by cash Journal Entries Dr. Preference share capital Cr. Preference share capital redemption reserve Dr. Preference share capital redemption reserve Cr. Cash Net effect: Dr. Preference share capital Cr. Bank XX XX

Redemption of shares Redeemable shares (可贖回股份) ►Shares issued with redemption terms at a specified future date Share redemption/buy-back (0) The new Companies Ordinance allows greater flexibility for the share redemption or buy-back ▶ The payment for the redemption may be made: ▶ Out of proceeds of fresh issue of new shares ▶ Out of company's distributable profits Out of capital, following procedures prescribed in the new Companies Ordinance (New Co. Ord.) Accounting for share redemption Procedures Shares to be redeemed (say preference share capital) On redemption by cash Journal Entries Dr. Preference share capital Cr. Preference share capital redemption reserve Dr. Preference share capital redemption reserve Cr. Cash Net effect: Dr. Preference share capital Cr. Bank XX XX

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter7: Financial Activities

Section: Chapter Questions

Problem 8QE

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Subscriptions receivable from sale of shares which are not collectible currently shall be presented asRequired to answer. Single choice. a. current assets b. deduction from the related subscribed share capital in the shareholder's equity section c. long-term investment d. other asset.
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What is redeemable shares? What is the dfferences between ordinary shares? What is share redemption. What is buy back?
Answer the question below and provide an explanation.
The entry to record the reissuance of treasury shares above their original acquisition cost includes Select the correct response: a debit to share premium O a debit to retained earnings a credit to share premium a debit to both share premium and retained earnings
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Which of the following statements is correct regarding working paper entries to facilitate the preparation of the consolidated financial statements? * A. Debit Non-controlling Interest in Net Assets in the working paper to assign to the non-controlling stockholders their share in the gain on bargain purchase. b. Debit Share Premium relating to issuance of stocks in the working paper to record the cost of SEC registration and listing fees. c. Credit Investment in Subsidiary Company Stock in the working paper to record the purchase of outstanding shares from subsidiary company. d. Credit Equipment in the working paper to adjust a fair value differential of an overvalued equipment.
Share-based payment transactions settled in equity are ? a) Measured at grant date fair value b) Remeasured each period c) Recorded at intrinsic value d) Measured at exercise date
Under PFRS9, reclassification of investment in equity securities: A. Is allowed as long as it is based on a change in the entity's business model B. Is allowed, as long as the reclassification is made within the year the investment was acquired C. Is allowed, since the entity always has the option to carry the investment as either FVPL or FVOCI D. Is not allowed
The par value of ordinary share capital represents a. The amount received by the corporation when the share was originally issued. b. The book value of the share capital c. The liquidation value of the share capital d. The legal nominal value assigned to the share capital
A Company issued $5,00,000/- new capital divided into $.10/- shares at a premium of $4/- per share payable as On Application $1/- per share On Allotment $4/- per share & $.2/- premium On Final Payment $.5/- per share & $.2/- premium Overpayments on application were to be applied towards sum due on allotment. Where no allotment was made money was to be returned in full. The issue was oversubscribed to the extent of 13,000 shares. Applicants for 12,000 shares were allotted only 1,000 shares and applicants for 2,000 were sent letters of regret. All money due on allotment and final call was duly received. Make the necessary entries in the company‟s book.
A company issued rights to its existing shareholders to purchase for par unissued shares of common stock with a par value of 10 per share. When the market value of the common stock was 12 per share, the rights were exercised. Common stock should be credited at 10 per share and a. Paid-in capital from stock rights credited at 2 per share b. Additional paid-in capital credited at 2 per share c. Retained earnings credited at 2 per share d. No credit made to additional paid-in capital or retained earnings