On January 1, 2020, Marimar Company reported the following shareholder's equity: Share capital, P100 par 6,000,000 Share premium 500,000 Retained earnings 1,800,000 Transactions during the year and othe rinformation relating to shareholders' equity were as follows: On January 26, the entity reacquired for cash 5,000 shares for P110 per share. On April 4, the entity sold for cash 3,000 shares of treasury for P140 per share. On June 1, the entity declared a cash dividend of P20 per share, payable July 5 to shareholders of record on July 1. On November 1, the entity declared a 2 for 1 split and changed the par value from P100 to P50. On November 20, shares were issued for the share split. On December 5, 4,000 shares were issued in exchange for aa second hand equipment. The equipment originally cost P400,000, was carried by the previous owner at a carrying amount of P200,000, and was fairly valued at P260,000 Net income for the current year was P1,730,000. Appropriated retained earnings equal to the cost of treasury shares. Required: Prepare journal entries to record the transactions. Prepare a statement of changes in equity for the year ended December 31, 2020. Present the shareholder's equity on December 31, 2020.

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 9P

Related questions

Question

On January 1, 2020, Marimar Company reported the following shareholder's equity:

Share capital, P100 par 6,000,000

Share premium 500,000

Retained earnings 1,800,000

Transactions during the year and othe rinformation relating to shareholders' equity were as follows:

On January 26, the entity reacquired for cash 5,000 shares for P110 per share.
On April 4, the entity sold for cash 3,000 shares of treasury for P140 per share.
On June 1, the entity declared a cash dividend of P20 per share, payable July 5 to shareholders of record on July 1.
On November 1, the entity declared a 2 for 1 split and changed the par value from P100 to P50. On November 20, shares were issued for the share split.
On December 5, 4,000 shares were issued in exchange for aa second hand equipment. The equipment originally cost P400,000, was carried by the previous owner at a carrying amount of P200,000, and was fairly valued at P260,000
Net income for the current year was P1,730,000.
Appropriated retained earnings equal to the cost of treasury shares.

Required: