You have been assigned to audit RUDOLPH Company. You are asked to summarize the transactions for the year ended December 31, 2021 affecting shareholders' equity and other related accounts. The Shareholders' Equity section of RUDOLPH's December 31, 2020 Statement of Financial Position had the following balances: Ordinary share capital, 2 par value, 1,000,000 shares authorized, 180,000 shares issued, 177,580 shares outstanding 360,000 Share premium - issuance 3,640,000 45,000 Share premium - treasury shares Retained earnings 649,378 Cost of 2,420 treasury shares (145,200) Total shareholders' equity 4,549,178 You have extracted the following information from the accounting records and audit working papers: 2021 • Jan. 11-RUDOLPH issued 1,300 treasury shares for $40 per share. • Apr. 1 - Sold 180, P1,000 9% bonds due April 2031 at 103 with one detachable warrant attached to each bond. Interest is payable annually on February 1. The fair market value of the bonds without the share warrants is 95. The detachable warrants have a fair value of $50 each and will expire on April 1, 2022. Each warrant entitles the holder to purchase 10 ordinary shares at $40 per share. • Jun. 6- 2,800 ordinary shares were subscribed for at #44 per share. 40% of the subscription was collected. • Aug. 20- The balance due on 2,400 shares were received and then issued. Oct. 1- There were 110 share warrants detached from the bonds and exercised. • RUDOLPH's net income for 2021 is $950,000
You have been assigned to audit RUDOLPH Company. You are asked to summarize the transactions for the year ended December 31, 2021 affecting shareholders' equity and other related accounts. The Shareholders' Equity section of RUDOLPH's December 31, 2020 Statement of Financial Position had the following balances: Ordinary share capital, 2 par value, 1,000,000 shares authorized, 180,000 shares issued, 177,580 shares outstanding 360,000 Share premium - issuance 3,640,000 45,000 Share premium - treasury shares Retained earnings 649,378 Cost of 2,420 treasury shares (145,200) Total shareholders' equity 4,549,178 You have extracted the following information from the accounting records and audit working papers: 2021 • Jan. 11-RUDOLPH issued 1,300 treasury shares for $40 per share. • Apr. 1 - Sold 180, P1,000 9% bonds due April 2031 at 103 with one detachable warrant attached to each bond. Interest is payable annually on February 1. The fair market value of the bonds without the share warrants is 95. The detachable warrants have a fair value of $50 each and will expire on April 1, 2022. Each warrant entitles the holder to purchase 10 ordinary shares at $40 per share. • Jun. 6- 2,800 ordinary shares were subscribed for at #44 per share. 40% of the subscription was collected. • Aug. 20- The balance due on 2,400 shares were received and then issued. Oct. 1- There were 110 share warrants detached from the bonds and exercised. • RUDOLPH's net income for 2021 is $950,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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What is the balance of
Transcribed Image Text:You have been assigned to audit RUDOLPH Company. You are asked to summarize the
transactions for the year ended December 31, 2021 affecting shareholders' equity and other
related accounts. The Shareholders' Equity section of RUDOLPH's December 31, 2020 Statement
of Financial Position had the following balances:
Ordinary share capital, 2 par value, 1,000,000 shares authorized,
180,000 shares issued, 177,580 shares outstanding
360,000
Share premium - issuance
3,640,000
45,000
Share premium - treasury shares
Retained earnings
649,378
Cost of 2,420 treasury shares
(145,200)
Total shareholders' equity.
P
4,549,178
You have extracted the following information from the accounting records and audit working
papers:
2021
Jan. 11 - RUDOLPH issued 1,300 treasury shares for $40 per share.
• Apr. 1 - Sold 180, P1,000 9% bonds due April 2031 at 103 with one detachable warrant
attached to each bond. Interest is payable annually on February 1. The fair market value
of the bonds without the share warrants is 95. The detachable warrants have a fair value
of $50 each and will expire on April 1, 2022. Each warrant entitles the holder to purchase
10 ordinary shares at $40 per share.
• Jun. 6- 2,800 ordinary shares were subscribed for at #44 per share. 40% of the
subscription was collected.
●
Aug. 20 - The balance due on 2,400 shares were received and then issued.
Oct. 1 - There were 110 share warrants detached from the bonds and exercised.
●
RUDOLPH's net income for 2021 is $950,000
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