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Requirements: a. b. What is the total shareholders' equity on December 31, 2018? What is the unappropriated retained earnings balance on December 31, 2018?

Requirements: a. b. What is the total shareholders' equity on December 31, 2018? What is the unappropriated retained earnings balance on December 31, 2018?

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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Problem 1: Pepper Company began operations on January 1, 2017, by issuing at P15 per share, one-half of the 475,000 ordinary shares (P1 par value) that had been authorized for issue. In addition, Pepper has 250,000 6% preference shares (P5 par value) authorized. During the 2017, Pepper reported net income of P512,500 and declared dividends of P118,750. per During 2018, Pepper completed the following transactions: January 10 Issued an additional 50,000 ordinary shares for P17 April 2 Issued 75,000 preference shares for P8 per share. July 21 2019. Authorized the acquisition of a custom-made machine to be delivered in January Pepper appropriated P147,500 of retained earnings for the purchase of the machine. October 25 Issued an additional 25,000 preference shares for P9 per share. December 31 Reported P607,500 of net income and declared a dividend of P317,500 to shareholders of Record on January 31, 2019, to be paid on February 4,2019. Requirements: share. a. b. What is the total shareholders' equity on December 31, 2018? What is the unappropriated retained earnings balance on December 31, 2018? Problem 2: The Choco Company is authorized to issue 600,000 shares of P10 par value ordinary share capital. Choco's accounting year ends on December 31. The following transactions occurred in 2018, the company's first year of operations. a. Issued 20,000 shares at P20 per share; received cash. b. Issued 2,500 shares to attorneys for services in securing the corporate charter and for preliminary legal costs of organizing the corporation. The fair value of the services was P85,000. C. Issued 300 shares, valued objectively at P15,000, to the employees instead of paying the cash wages. d. Issued 325,000 shares in exchange for a building valued at P3,000,000 and land valued at P4,000,000. (The building was originally acquired by the investor for P2,500,000 and has P1,000,000 of accumulated depreciation; the land was originally acquired for P1,500,000.) Requirements: 1. What is the ordinary share capital balance on December 31, 2018? 2. The amount of share premium to be reported on Choco's statement of financial position at December 31, 2018?
Transcribed Image Text:Problem 1: Pepper Company began operations on January 1, 2017, by issuing at P15 per share, one-half of the 475,000 ordinary shares (P1 par value) that had been authorized for issue. In addition, Pepper has 250,000 6% preference shares (P5 par value) authorized. During the 2017, Pepper reported net income of P512,500 and declared dividends of P118,750. per During 2018, Pepper completed the following transactions: January 10 Issued an additional 50,000 ordinary shares for P17 April 2 Issued 75,000 preference shares for P8 per share. July 21 2019. Authorized the acquisition of a custom-made machine to be delivered in January Pepper appropriated P147,500 of retained earnings for the purchase of the machine. October 25 Issued an additional 25,000 preference shares for P9 per share. December 31 Reported P607,500 of net income and declared a dividend of P317,500 to shareholders of Record on January 31, 2019, to be paid on February 4,2019. Requirements: share. a. b. What is the total shareholders' equity on December 31, 2018? What is the unappropriated retained earnings balance on December 31, 2018? Problem 2: The Choco Company is authorized to issue 600,000 shares of P10 par value ordinary share capital. Choco's accounting year ends on December 31. The following transactions occurred in 2018, the company's first year of operations. a. Issued 20,000 shares at P20 per share; received cash. b. Issued 2,500 shares to attorneys for services in securing the corporate charter and for preliminary legal costs of organizing the corporation. The fair value of the services was P85,000. C. Issued 300 shares, valued objectively at P15,000, to the employees instead of paying the cash wages. d. Issued 325,000 shares in exchange for a building valued at P3,000,000 and land valued at P4,000,000. (The building was originally acquired by the investor for P2,500,000 and has P1,000,000 of accumulated depreciation; the land was originally acquired for P1,500,000.) Requirements: 1. What is the ordinary share capital balance on December 31, 2018? 2. The amount of share premium to be reported on Choco's statement of financial position at December 31, 2018?
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