Exercise 10-3 (Reacquisition of Shares through Donation)In 2014, the Jolo Company issued 150,000 shares of its P10 par ordinary share capital atP25. In 2015, a major stockholder donated 5,000 shares when the market value of theshare capital is P40 per share. Subsequently, all the donated shares were sold at P50 pershare.Instructions:1.2.Prepare entries to record the receipt of the donated shares and their subsequentsale using the two alternative methods of recording.State the number of capital shares issued and outstanding after the donation andafter the sale of the donated shares.

The objective of the question is to record the receipt of the donated shares and their subsequent…

Answered: Exercise 10-3 (Reacquisition of Shares…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem #2 (20 points) Donations of Assets and Shares Marasigan Corp. received the following items as donations during 2018: Mar. 21 Arias Realty gave the corporation 5 hectares of land valued at P6,000,000. Marasigan agreed to build a distribution warehouse on the property and to employ at least 50 local residents. Apr. 30 A shareholder donated 10,000 shares of Marasigan P200 par ordinary shares. The stock was selling for P425 per share on Apr. 30. June 25 Bobadilla Holdings donated a mobile office, which was moved to the donated land and used as a temporary office. An independent appraisal established the value of the mobile office at P675,000. July 15 4,000 of the ordinary shares received as a donation on Apr. 30 were sold for P1,820,000. Required: Prepare journal entries to record the transactions related to the donations. Compute the amount of donated capital that Marasigan Corporation would present on Dec. 31, 2018 statement of…
On December 1, 2010, Gates Corp. received a donation of 2,000 shares of its P5 par value ordinary shares from a shareholder. On that date, the share’s fair value was P35 per share. The share was originally issued for P25 per share. By what amount would this donation cause total shareholders’ equity to decrease? a. P70,000 c. P20,000 b. P50,000 d. P 0
For the current year, Work-From-Home Company received a donation of 3,000 shares with a par value of P20 from the shareholder. The market value of the share was P150. The shares were originally issued P50 per share. As a result of the donation, what was the decrease in the shareholder’s equity? A. 150,000 B. 450,000 C. 0 D. 300,000
Case study 3: Victory SAOG is registered with an authorized capital of OMR 50 million ordinary shares of 100 baiza each. The company had issued and paid up capital of OMR 33 million. In the year 2017 Victory SAOG has an outlined share repurchase program which would enable the company to repurchase at least 10 per cent of its outstanding shares. The company had an opening balance of OMR 55 million in its retained earnings account. After completing the required formalities for such repurchase in the vear 2017, the company was able to repurchase the 19.8 million shares valued at OMR 31,680,000 in the month of August. Later in the year 2019 the company was able to repurchase another 10 million shares for OMR 15 million in July. The following are the profits earned by the company over the period of 2017 to 2019: OMR in Millions' 2017: 110 2018: 150 2019: 160 The company decided to distribute dividends as mentioned below: #Interim dividend: 2017: Nil 2018:5% 2019:Nil #Final dividend:…
1. A company received 3,000, P10 par ordinary shares from one of its shareholders. In the same year the company reissued the shares at P15 per share. If the fair value of the shares was P13 at the date of donation, what amount was credited to the donated capital account when the shares were reissued? 2. In 2021, a company issued 6% bonds with a maturity value of P40,000, together with 1,000 shares of its P10 par value ordinary share, for a combined cash amount of P150,000. The market value of a company’s share on that date cannot be ascertained. If the bonds were issued separately, they would have been sold for P35,000 on an 8% yield to maturity basis. Determine the increase in share premium as a result of this transaction.3. In 2021, a company issued 1,000,000 no-par value ordinary shares for P1.15 per share. The stated value of the shares is P1. Also, during the year, some potential shareholders of the company subscribed for 800,000 of the same ordinary shares for P1.20 per share…
36. A company received 3,000, P10 par ordinary shares from one of its shareholders. In the same year the company reissued the shares at P15 per share. If the fair value of the shares was P13 at the date of donation, what amount was credited to the donated capital account when the shares were reissued?
C. Prepare the journal entries for this transactions Peterson Company issued 4,000 shares of preferred stock for $240,000.The stock has a par value of $60 per share. On December 2, 2014, Ewell Company purchases a piece of land from the original owner. In payment for the land, Ewell Company issues 8,000 shares of common stock with $1.00 par value. The land has been appraised at a market value of $400,000. Chaney Corporation issued 20,000 shares of common stock on January 1, 2014. The stock has par value of $1.00 per share and was sold at $30 per share. Bradley Corporation issued 10,000 shares of common stock on January 1, 2013. The stock has par value of $0.01 per share and was sold at $25 per share.
MUSCAT SAOG has registered its capital as 5,000,000 divided into 5,000,000 shares of OMR 1 each. The company offered 3,000,000 shares of OMR 1 each to the public for subscription. The company received 90% of issued shares from the applicants. The company called up OMR 0.700 baisa. The company received the entire amount. ANSWER QUESTION NO. 1 TO 5
Donations of Assets and Shares Marasigan Corp. received the following items as donations during 2018: Mar. 21 Arias Realty gave the corporation 5 hectares of land valued at P6,000,000. Marasigan agreed to build a distribution warehouse on the property and to employ at least 50 local residents. Apr. 30 A shareholder donated 10,000 shares of Marasigan P200 par ordinary shares. The stock was selling for P425 per share on Apr. 30. Bobadilla Holdings donated a mobile office, which was moved to the donated land and used as a temporary office. An independent appraisal established the value of the mobile office at P675,000. June 25 July 15 4,000 of the ordinary shares received as a donation on Apr. 30 were sold for P1,820,000. Required: 1. Prepare journal entries to record the transactions related to the donations. 2. Compute the amount of donated capital that Marasigan Corporation would present on Dec. 31, 2018 statement of financial position.
For the current year, Spiderman Company received a donation of 3,000 shares with a par value of P20 from the shareholder. The market value of the share was P150. The shares were originally issued P50 per share. As a result of the donation, what was the decrease in the shareholder’s equity?
For the current year, Work-From-Home Company received a donation of 3,000 shares with a par value of P20 from the shareholder. The market value of the share was P150. The shares were originally issued P50 per share. As a result of the donation, what was the decrease in the shareholder’s equity?
Pico Company was organized on January 1, 2015 with authorized capital of 100,000 shares of P200 par value. During 2015, Pico had the following transactions affecting stockholders' equity: Issued 25,000 shares at P220 a share January 10 March 25 Issued 1,000 shares for legal services when the fair value was P240 a share September 30 Issued 5,000 shares for a tract of land when the fair value was P260 a share. What amount should Pico report as additional paid in capital at December 31, 2015? O A. 840,000 O B. 800,000 O C. 540,000 O D. 500,000

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