Answered: Refer to Alom, How much are the total…

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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Question

On the date of incorporation, the condensed balance sheet of Alom Partnership showed the following:

Cash            P 28,000
Other Assets            256,000
Liabilities            50,000
Alpha Capital            180,000
Omega Capital            54,000

The Securities and Exchange Commission authorized the corporation to issue the following shares:

o 10,000 shares of 12% Preference Share Capital, par P 100; and
o 20,000 shares of Ordinary Share Capital, par P 50.

The corporation issued 1,500 preference shares and 800 ordinary shares to Alpha in exchange for her equity in the partnership. On the other hand, Omega received 1,500 preference shares and 1,200 ordinary shares for her equity in the partnership. Any capital deficiency of the partners will be paid in cash. Three other incorporators each subscribed at par, 1,500 preference shares and 2,000 ordinary shares paying only 25% of their subscriptions and the balance payable in two months from the date of subscription.

Refer to Alom, How much are the total assets of the new corporation?