You are auditing the balance sheet of the Ballares Company on December 31, 2004, which has the following items on the equity side of the balance sheet: (see image below) Determine the total book value of the 40,000 shares of ordinary share Current Liabilities2,858,0003,000,0001,600,000Bonds PayableReserve for Bonds Retirement6% Cumulative Preference Share, P100 par value(entitled to P110 and accumulated dividendsper share in voluntary liquidation). Authorized,30,000 shares; issued, 20,000 shares; in treasury,1,500 sharesOrdinary share, P100 par value, authorized,100,000 shares; issued and outstanding, 40,0001,850,000sharesPremium on preference sharePremium on ordinary shareRetained earnings4,000,000100,000673,0001,312,600The company proposes to finance a plant expansion program by issuing an additional20,000 shares of ordinary share. Ordinary shareholders of record October 1, 2004 werenotified that they will be permitted to subscribe to the new issue at P150 per share up to50% of their holdings. The market value of the share on October 1, 2004, was P172.50.The share goes ex-rights in the market on October 3, 2004.

Shares- The shares are the company's financial assets. The value of the shares fluctuates with the…

Answered: You are auditing the balance sheet of…

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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You are auditing the balance sheet of the Ballares Company on December 31, 2004, which has the following items on the equity side of the balance sheet: (see image below) Determine the total book value of the 40,000 shares of ordinary share

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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