Nakeeta company owned 50,000 ordinary shares which were purchased for P120 per share. During the year, the investee distributed 50,000 stock rights to the investor. The investor was entitled to buy one new share for P90 cash and two of these rights. Each share had a market value of P130, and each righ had a market value of P20 on the date of issue. What amount should be debited to the investmen account upon exercise of the share rights if the rights were not accounted for separately? O 2,250,000 O 3,250,000 O 3,050,000 5,500,000

Nakeeta company owned 50,000 ordinary shares which were purchased for P120 per share. During the year, the investee distributed 50,000 stock rights to the investor. The investor was entitled to buy one new share for P90 cash and two of these rights. Each share had a market value of P130, and each righ had a market value of P20 on the date of issue. What amount should be debited to the investmen account upon exercise of the share rights if the rights were not accounted for separately? O 2,250,000 O 3,250,000 O 3,050,000 5,500,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Vaughn Corporation sold 390 shares of treasury stock for $55 per share. The cost for the shares was $45. The entry to record the sale will include a O credit to Treasury Stock for $21450. O credit to Paid-in Capital from Treasury Stock for $3900. O debit to Paid-in Capital in Excess of Par for $3900. O credit to Gain on Sale of Treasury Stock for $17550.
At what amount should the investment be shown on Inn Corporation had 30,000 ordinary shares of NPA Company which it acquired during Year 2 for a total consideration of P1,800,000, including P30,000 directly attributable costs. The shares were acquired for trading purposes. On December 31, Year 2, the NPA shares were selling at P65 per share. In July Year 3, Inn Corporation received a 20% bonus issue. Subsequently during the year, it sold 15,000 shares at 70 per share. The fair value of NPA ordinary at December 31, Year 3 was P72 per share. Required: December 31, Year 3 statement of financial position?
At what amount should the investment be recorded initially? 2. On April 15, 2021, Pepper purchased 15,000 shares of Atty Group for P150,000. The commission paid to the broker amounted to P8,500. Management made an irrevocable choice to subsequently measure the shares at FVOCI. At what amount should the investment be recorded initially?
The securities owned by Jane Company were held as a long-term investment. During the currentyear, the following transactions occurred:Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from XYZ Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the XYZ Corporation’s share rights.Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach indetermining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73 per…
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…
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?
On June 1, Axie Corporation issued 8,000 shares of its P100 par ordinary share capital to BEAST for a building. The shares were actively traded in the stock exchange at P150 per share. The BEAST's last property tax bill, the land had an assessed value of P1,640,000. What is the increase in the share premium account of Axie Company as a result of the foregoing issuance of shares?
The securities owned by Jane Company were held as a long-term investment. During the currentyear, the following transactions occurred:Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.Apr 1 Received a cash dividend of P6 per share from ABC Company.July 1 Received a share for a share dividend from XYZ Corporation.Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.Oct 1 Received a cash dividend of P6 per share from ABC Company.Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every tenrights tendered at P25. At the time of issuance, the market value of the right is P4. Sharerights are not accounted for separately.Nov 15 Exercised the XYZ Corporation’s share rights.Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach indetermining the cost of the shares sold.Dec. 31 The fair values of the portfolio is as follows:ABC Company – P73 per…
A client had the following investment transactions in 20X0: On March 20, purchased 1,000 shares of XYZ Co. ordinary shares at P80.50 plus broker’s fee of P500. Received stock rights permitting the purchase of one share at P60 for every four shares owned on September 1. On this date, the rights had a market price of P3 each, and the market price of the stock ex-right was P72 per share. On Nov. 10, exercised 500 rights from the stock purchased March 20. If stock rights are not accounted for separately, determine the carrying value of the investments if 1/3 of the total holdings was sold for P75 a share. Round off answer to 2-decimal places.
Harold Corporation declared share dividends of 1 share for every 5 shares owned on its 300,000 issued and outstanding ordinary shares with a par value of P50 per share. At the time of declaration the fair value of the ordinary shares was P65 per share and P80 per share at the time the shares were issued. What amount should be charged to the Retained Earnings account upon date of declaration?
Webb Corporation's trial balance for July 31, the end of its fiscal year, included the following accounts: Accounts Receivable $30,000 Inventories 46,000 Franchise 35,000 Investments 48,000 Prepaid Insurance 5000 Note Receivable 102,000 Cash in Bank 8000 The investments account consists of marketable securities of which management plans to sell half of by December 31. The rest of the securities will be held longer than one year. Prepaid insurance is a two-year policy that was purchased on July 31. The note receivable is an installment note that will be paid in three equal installments on December 31 of each year. The amount that should be classified as current assets in the July 31 balance sheet is ________. $144,500 $182,500 $212,500 $147,000
When incorporated Y Ltd. Issued 2,000 common shares to A for dollar 2,000. In year 2, Y Ltd. issued 1,600 additional common shares to B for dollar 16,000, the market value of the shares at that date. What is the total paid up capital of the common shares owned by A?