EXERCISE I 5The Red Hat Company began operations in January 2018 and reported the following results of operations for each ofits first three years of operations: 2018- P 600,000; 2019- P 240,000 loss; 2020- P 3,900,000 profit.At December 31,2020, the company's capital accounts were as follows:9% Cumulative Preference share capital, P 100 par; 100,000 shares authorized;60,000 shares issued and outstandingP 6,000,000Ordinary Share Capital, P 10 par; 1,000,000 shares authorized; 800,000 sharesissued and outstanding8,000,000Red Hat Company has never paid a cash or bonus issue and there has been no change in the capital accounts since itbegan operations.REQUIRED:a.) Computation of book value per share of preference and ordinary share at December 31,2020.b.) Assuming that the preference share has a liquidation value of P 105 per share, compute the book value per share ofthe preference and ordinary share at December 31,2020.

Preference Share Capital = P 6,000,000 Dividend = 9% Preference share outstanding = 60,000 Ordinary…

Answered: The Red Hat Company began operations in…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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On January 1, 2020, Triad Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar 1 Issued 25,000 shares of common stock for $550,000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. June 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.25 per share to stockholders of record on December 31. Prepare journal entries to record the above transactions. (If no entry is required, select "No entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually) Account Titles and Explanation Date Mar. 1 Debit Credit
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The Shareholders’ Equity section of Green Corporation at December 31, 2019 showed the following: 8% cumulative Preference share capital, P 100 par, liquidating value P110 - P2,000,000; Ordinary Share Capital, P50 par - P2,500,000; Additional Paid In Capital - P 500,000; Retained Earnings - P 1,000,000. During the year, the company earned profit of P 500,000. Compute the book value per share for the Preference share assuming dividends are in arrears for 3 years including the current yearUsing data, Compute the book value per share for the Ordinary Share Capital
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