Edguy Company was organized on January 1, 2019. On that date, it issued 200,000 ordinary shares of P10 par value at P15 per share. The entity was authorized to issue 400,000 ordinary shares. During the period January 1, 2019 through December 31, 2020, the entity reported net income of P750,000 and paid cash dividend of P380,000. On January 5, 2020, the entity purchased 12,000 ordinary shares at P12 per share. On December 31, 2020, 8,000 treasury shares were sold at P8 per share and the remaining treasury shares were retired. The entity used the cost method of accounting for treasury shares. What amount should be reported as total shareholders' equity on December 31, 2020?
Edguy Company was organized on January 1, 2019. On that date, it issued 200,000 ordinary shares of P10 par value at P15 per share. The entity was authorized to issue 400,000 ordinary shares. During the period January 1, 2019 through December 31, 2020, the entity reported net income of P750,000 and paid cash dividend of P380,000. On January 5, 2020, the entity purchased 12,000 ordinary shares at P12 per share. On December 31, 2020, 8,000 treasury shares were sold at P8 per share and the remaining treasury shares were retired. The entity used the cost method of accounting for treasury shares. What amount should be reported as total shareholders' equity on December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Edguy Company was organized on January 1, 2019. On that date, it issued 200,000 ordinary shares of P10 par value at P15 per share. The entity was authorized to issue 400,000 ordinary shares. During the period January 1, 2019 through December 31, 2020, the entity reported net income of P750,000 and paid cash dividend of P380,000. On January 5, 2020, the entity purchased 12,000 ordinary shares at P12 per share. On December 31, 2020, 8,000 treasury shares were sold at P8 per share and the remaining treasury shares were retired. The entity used the cost method of accounting for treasury shares. What amount should be reported as total shareholders' equity on December 31, 2020?
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