Problem 8-24 X Corporation issued its share capital in exchange for a portion of land with lar value of PI.000,000. Information related to share capital is as follows: Number of Par value Market value Classes of share capital: 68 Preierence shares Ordinary shares shares sold per share 2,500 5,000 PI00 100 per share None P150 Required: Record the issuace of the two classes of share capital at a lump sum price Inmn Sum Sale of Share Capital
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- PROBLEM 1 The following data were compiled prior to preparing statement of financial position of the Conviction Corporation:Authorized share capital, P100 par value P 4,000,000Unissued share capital 800,000Subscribed share capital 480,000Subscriptions receivable `120,000Premium on share capital 320,000Premium on bonds payable 240,000Gain on sale of treasury shares 80,000Donated capital 800,000Share warrants outstanding 200,000Reserve for bond sinking fund 400,000Reserve for depreciation 600,000Treasury shares, at cost 144,000Retained earnings, unappropriated 720,000Cash dividends payable 160,000Revaluation increment on property 800,000Net unrealized loss on financial assetsat fair value through OCI 96,000 1. What is the total legal capital? 2. What is the total shareholders’ equity?Question 1 The following information relates to a company listed on Luse- Mungwi PLC ZMK Issued share capital (1000 shares) Share premium. Reserves. Share holders funds. 6% Irredeemable Debentures. 9% Redeemable Debentures. Bank loan. Total Long Term Liabilities. Million 4 000 2 600 290 6,890 2,800 2,900 1 000 6 700 The current cum interest market value per k100 units is k103 and k105 fir the 6% and 9% Debentures respectively. The 9% Debenture is redeemable at par in 10 years time. The bank loan bears interest rate of 2% above the base rate (current base rate is 15%). The current ex-div market price of shares is k1, 100 and a dividend of K100 per share which is expected to grow at a rate of 5% per year has just been paid. The effective corporation tax rate for Mungwi is 30%. Required: A) Calculate the effective after tax weighted Average Cost of Capital (WACC) fir Mungwi PLCquity Problem 4: Legal and Contributed Capital Aquinde Corporation has the following accounts in its shareholders equity on February 1, 20x1: Preference share, P100 par Ordinary share, P50 par Subscribed preference share Subscription receivable - preference Subscribed ordinary share Subscription receivable - ordinary Share premium - preference Share premium - ordinary Retained earnings Treasury share 5,000 ordinary share at cost 2,500,000 5,500,000 1,500,000 800,000 2,000,000 600,000 200,000 400,000 2,000,000 400,000 Required: Compute the following Contributed capital b. Legal capital Total shareholders' equity a. C.
- Exercise 6-5 (Journalizing Share Capital Transactions) The BCD Corporation was organized on January 2, 2021 with authorized capital of 500,000 shares of P20 par value ordinary share capital. During the first two years, the following transactions took place: 2021 Jan Issued 125,000 shares to the incorporators at P26. 2 Issued 62,500 shares at P35. 2 Ma Ma Issued 25,000 in exchange for land valued at P350,000 and a building valued at P550,000. De 3 The Income Summary account showed a credit balance of P750,000 and this was transferred to the Retained Eamings account. 3 Declared cash dividends of P3.50 per share payable on January 31, 2022 to shareholders of record of January 15, 2022. 2022 Jan 3 Paid dividends declared on December 31. Fe b Ma Received subscriptions for 50,000 shares at P55, with a down payment of 35% 4 1 of total subscriptions. Received balance due on the subscription of February 14 and shares were issued to the subscribers. De 3 The Income Summary account showed a…Question 16 Real Razel company's capital structure at January 1, 20A was as follows: Shares issued and outstanding for Ordinary share capital, 400,000 and for preference share capital, 100,000. On October 1, 20A, Real Razel issued a 10% share dividend on its ordinary share, and paid annual cash dividend of P400,000 on its preference share. The preference share capital is noncumulative, nonparticipating and nonconvertible. Net income for the year ended December 1, 20A was P3,840,000. What amount should be reported as basic earnings per share? CHOICES: 8.20 8.72 9.36 7.82Answer with computation and explanation X Company sold 1,000 ordinary shares at par of P20 per share for P50,000. The journal entry to record the transaction would have a a credit to ordinary shares for P50,000. b credit to share premium for P20,000 C. credit to ordinary shares of P20,000. d. debit to share premium of P30,000
- Exercise 6-5 (Journalizing Share Capital Transactions) The BCD Corporation was organized on January 2, 2021 with authorized capital of 500,000 shares of P20 par value ordinary share capital. During the first two years, the following transactions took place: 2021 Jan 2 Issued 125,000 shares to the incorporators at P26. Ma 2 Issued 62,500 shares at P35. r Issued 25,000 in exchange for land valued at P350,000 and a building valued at 1 Ма P550,000. The Income Summary account showed a credit balance of P750,000 and this 1 r De was transferred to the Retained Earnings account. 3 Declared cash dividends of P3.50 per share payable on January 31, 2022 to 1 shareholders of record of January 15, 2022. 2022 Jan Paid dividends declared on December 31. Fe Received subscriptions for 50,000 shares at P55, with a down payment of 35% of total subscriptions. Received balance due on the subscription of February 14 and shares were issued to the subscribers. Ma r De The Income Summary account showed a…Item Nos. 14 and 15 are based on the following information: revealed the following information: Preference Share Capital, par P 100 Preference Share Premium- Ordinary Share Capital- Ordinary Share Premium-- Subscribed Ordinary Shares Retained Earnings Ordinary Subscriptions Receivable 000.00S The shareholders' equity section of Charlie Company's balance sheet P 2,300,000 805,000 5,250,000 2,750,000 50,000 -- 1,900,000 400,000 - _____Item No. 8 is based on the following information: sid 000,001 9 Whistleblow, Inc. issued 500 ordinary shares with a par value of P 24 per share to a lawyer for the latter's legal services. The shares were in payment for the 100 hours rendered by the lawyer who billed the company P 160 per hour. On the date of share issuance, the shares were trading in the stock exchange at P 32 per share. 1 000.00
- 4. An entity showed the following data:Share capital, par value P50 5,000,000Share premium 200,000Retained Earnings 2,000,000Market value of share on declaration date 75Market value of share on distribution date 85Treat each item independently: a. If the entity would declare a 1 for 5 share dividend, what amount would be charged to retained earnings? b. What amount will be credited to share premium if the entity would declare 15% share dividend?EXERCISE 6 The Conception Enterprises, Inc. had the following shareholder's equity balances at December 31,2020: Preference Share Capital, P 20 par, 100, 000 shares authorized P 2,000,000 Ordinary Share Capital, P 30 par, 100, 000 shares authorized P 1,800,000 Share Premium- Preference Share 160,000 Share Premium- Ordinary Share 250,000 Retained Earnings 800,000 The preference share is convertible into ordinary share. REQUIRED: Journalize the conversion of 10,000 preference shares under each of the following independent assumptions: a.) Preference share is convertible into ordinary shares on a share basis. b.) 2 shares of preference are convertible into one ordinary share.3. LABILE ADAPTABLE Co.'s equity as of January 1, 20×1 is as Requirem Reg 3. LABILE ADAPTABLE Co.'s equity as of January 1, 20x1 follows: Share capital (authorized 20,000 shares, P100 par value) Share premium Retained earnings Total shareholders' equity 1,600,000 320,000 1,080.000 3,000.000 LABILE Co. reacquires 1,000 shares at P90 on July 1, 20x1. Requirements: Provide the entries to record the reacquisition and the reissuance under the following independent scenarios: a. all the treasury shares were reissued on Sept. 1, 20x1 at P140. b. all the treasury shares were reissued on Sept. 1, 20x1 at P60.