The Meg Company began operations in January 2013 and reported the following results for each of its three years of operations. 2014 – P520,000 loss; 2015 – P80,000 loss; 2016 – P1,600,000 profit At December 31, 2016, Meg Company’s capital accounts were as follows: 8% Cumulative Preference Share Capital, P100 par; 50,000 shares authorized, issued and outstanding P5,000,000 Ordinary Share Capital, P10 par; 1,000,000 shares authorized; 750,000 shares issued and outstanding 7,500,000 Meg Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2014. The corporation law permits dividends only from retained earnings. a. What is the book value of the ordinary share at December 31, 2016?A. P 9.73 B. P10.00 C. P10.80 D. P11.33 b. Use the same information given in number 53. What is the books value of the ordinary share at December 31, 2016 assuming that the preference share has a liquidating value of P106 per share? A. P10.80 B. P10.00 C. P9.60 D. P9.33
The Meg Company began operations in January 2013 and reported the following results for each of its three years of operations.
2014 – P520,000 loss; 2015 – P80,000 loss; 2016 – P1,600,000 profit
At December 31, 2016, Meg Company’s capital accounts were as follows:
8% Cumulative
50,000 shares authorized, issued and outstanding P5,000,000
Ordinary Share Capital, P10 par;
1,000,000 shares authorized;
750,000 shares issued and outstanding 7,500,000
Meg Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2014. The corporation law permits dividends only from
a. What is the book value of the ordinary share at December 31, 2016?A. P 9.73
B. P10.00
C. P10.80
D. P11.33
b. Use the same information given in number 53. What is the books value of the ordinary share at December 31, 2016 assuming that the preference share has a liquidating value of P106 per share?
A. P10.80
B. P10.00
C. P9.60
D. P9.33
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