You are engaged to perform the first audit of the Parker Company for the year ended December 31, 2020. You find the following account balances related to shareholders' equity: Preference shares, P100 par P 3,000,000 Ordinary shares, P10 par 6,500,000 Capital surplus (1,640,000) Retained earnings 15,000,000 Due to the antiquated terminology and negative balance, you examine the Capital Surplus account first and find in it the following entries: Credit (Debit) Premium on ordinary shares P 2,710,000 Capital from donated land 1,600,000 Treasury shares (50,000 ordinary shares at cost) ( 750,000) Premium on preference shares 300,000 Appropriation for contingencies 2,500,000 Share dividend issued (50%) (2,000,000) Prior period adjustment (net of income taxes) (1,200,000) Loss from the fire (uninsured), 2020 (1,800,000) Property dividend distributed ( 600,000) Cash dividends declared to be paid in 2021 (2,400,000) Balance (P1,640,000) Your examination of the Preference Shares and Ordinary Shares accounts reveals that the amounts shown correctly state the total par value of the issued share capital. The Retained Earnings account contains the accumulated earnings of the company, with the exception of any items of retained earnings that were inappropriately debited or credited to the Surplus account. The unappropriated retained earnings is ?
You are engaged to perform the first audit of the Parker
Company for the year ended December 31, 2020. You
find the following account balances related to shareholders'
equity:
Ordinary shares, P10 par 6,500,000
Capital surplus (1,640,000)
Retained earnings 15,000,000
Due to the antiquated terminology and negative balance,
you examine the Capital Surplus account first and find in it
the following entries:
Credit
(Debit)
Premium on ordinary shares P 2,710,000
Capital from donated land 1,600,000
Treasury shares (50,000 ordinary shares
at cost)
( 750,000)
Premium on preference shares 300,000
Appropriation for contingencies 2,500,000
Share dividend issued (50%) (2,000,000)
Prior period adjustment (net of income
taxes)
(1,200,000)
Loss from the fire (uninsured), 2020 (1,800,000)
Property dividend distributed ( 600,000)
Cash dividends declared to be paid in
2021
(2,400,000)
Balance (P1,640,000)
Your examination of the Preference Shares and Ordinary
Shares accounts reveals that the amounts shown correctly
state the total par value of the issued share capital. The
Retained Earnings account contains the
earnings
of retained earnings that were inappropriately debited or
credited to the Surplus account.
The unappropriated retained earnings is ?
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