You are engaged to perform the first audit of the Torrents Company for the year ended December 31, 2022. You find the following account balances related to shareholders' equity:
You are engaged to perform the first audit of the Torrents Company for the year ended December 31, 2022. You find the following account balances related to shareholders' equity:
| P3,000,000 | |
| 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 Capitak Surplus account first and find in it the following entries:
| Credit/(Debit) | |
| Premium on Ordinary Shares | P2,710,000 |
| 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), 2022 | (1,800,000) |
| Property dividend distributed | (600,000) |
| Cash dividends declared to be paid in 2023 | (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
1. The compound
2. The total appropriated retained earnings is
3. The unappropriated retained earnings is
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