TOPIC: Contributed Capital (Issuance of Shares, Reacquisition, Reissuance, Retirement, Donation, Conversion, Share Split, etc.) Country: Philippines 1) On December 1, 2018, ABC Company exchanged 40,000 shares of its P10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by Ban at a cost of P40 per share and are accounted for under the cost method. On the date of exchange, the ordinary shares had a fair value of P55 per share, but the shares were originally issued at P30 per share. What is the increase in equity as a result of the exchange? 2) ABC Company was organized on January 1, 2022 with 100,000 authorized shares of P100 par value. January 15 -Sold 30,000 shares at P150 per share. February 14 -Issued 2,000 shares for legal services with a fair value of P300,000. The shares on this date are quoted at P160 per share. March 27 -Purchased 5,000 treasury shares at a cost of P12 per share. October 31 -Issued P4,000,000 convertible bonds at 110. The bonds are quoted at 97 without the conversion feature. November 5 -Declared a 2-for-1 share split when the market value of the share was P160. December 17 -Sold 10,000 shares at P75 per share. What total amount should be recognized as share premium on December 31, 2022? 3) ABC Company canceled 5,000 shares of P25 par value held in treasury at an average cost of P130 per share. Before cancellation of the treasury shares, the entity had the following shareholders' equity: Share capital 625,000 Share premium 750,000 Retained earnings 900,000 Treasury shares, at cost 650,000 What amount should be reported as share capital outstanding after cancelation of treasury shares? 4) ABC Company retired 50,000 ordinary shares, P5 par value, which it held in the treasury at an average cost of P26 per share on December 31, 2021. The balance in ABC's shareholders' equity accounts before recording the retirement of the treasury shares are: Ordinary share capital 1,080,000 Share premium 1,500,000 Treasury shares (at cost) 1,300,000 Retained earnings 1,800,000 ABC should reported ordinary shares outstanding in its December 31, 2021 statement of financial position of? 5) ABC Company reported the following information on December 31, 2020: Ordinary share capital, P3 par 600,000 Share premium 800,000 Treasury shares, at cost 50,000 Net unrealized loss on available for sale securities (investment at FVTOCI) 20,000 Retained earnings appropriated for unissued earthquake loss 150,000 Retained earnings unappropriated 200,000 What amount should be reported as total shareholders' equity on December 31, 2020? 6) ABC Company was incorporated on January 1, 2018 with 100,000 ordinary shares, no par value, stated value P40 and 50,000, 10 percent cumulative preference shares, P100 par. During 2018, the entity issued 25,000 ordinary shares for a total of P1,625,000 and 10,000 preference shares at P120 per share. In addition, on December 20, 2018, subscription for 10,000 ordinary shares were taken at a purchase price of P55 per share, half of the subscription price was paid on that date. The balance for the subscribed shares was paid on January 2, 2019 and the share certificate were issued on the same date. What amount should be reported as total contributed capital on December 31, 2018?
TOPIC: Contributed Capital (Issuance of Shares, Reacquisition, Reissuance, Retirement, Donation, Conversion, Share Split, etc.)
Country: Philippines
1) On December 1, 2018, ABC Company exchanged 40,000 shares of its P10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by Ban at a cost of P40 per share and are accounted for under the cost method. On the date of exchange, the ordinary shares had a fair value of P55 per share, but the shares were originally issued at P30 per share. What is the increase in equity as a result of the exchange?
2) ABC Company was organized on January 1, 2022 with 100,000 authorized shares of P100 par value.
January 15 -Sold 30,000 shares at P150 per share.
February 14 -Issued 2,000 shares for legal services with a fair value of P300,000. The shares on this date are quoted at P160 per share.
March 27 -Purchased 5,000 treasury shares at a cost of P12 per share.
October 31 -Issued P4,000,000 convertible bonds at 110. The bonds are quoted at 97 without the conversion feature.
November 5 -Declared a 2-for-1 share split when the market value of the share was P160.
December 17 -Sold 10,000 shares at P75 per share.
What total amount should be recognized as share premium on December 31, 2022?
3) ABC Company canceled 5,000 shares of P25 par value held in treasury at an average cost of P130 per share. Before cancellation of the treasury shares, the entity had the following shareholders' equity:
Share capital 625,000
Share premium 750,000
Treasury shares, at cost 650,000
What amount should be reported as share capital outstanding after cancelation of treasury shares?
4) ABC Company retired 50,000 ordinary shares, P5 par value, which it held in the treasury at an average cost of P26 per share on December 31, 2021. The balance in ABC's shareholders' equity accounts before recording the retirement of the treasury shares are:
Ordinary share capital 1,080,000
Share premium 1,500,000
Treasury shares (at cost) 1,300,000
Retained earnings 1,800,000
ABC should reported ordinary shares outstanding in its December 31, 2021
5) ABC Company reported the following information on December 31, 2020:
Ordinary share capital, P3 par 600,000
Share premium 800,000
Treasury shares, at cost 50,000
Net unrealized loss on available for sale securities (investment at FVTOCI) 20,000
Retained earnings appropriated for unissued earthquake loss 150,000
Retained earnings unappropriated 200,000
What amount should be reported as total shareholders' equity on December 31, 2020?
6) ABC Company was incorporated on January 1, 2018 with 100,000 ordinary shares, no par value, stated value P40 and 50,000, 10 percent cumulative
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