On December 1, 2018, Ban Company exchanged 40,000 shares of its P10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by Ban at a cost of P40 per share and are accounted for under the cost method. On the date of exchange, the ordinary shares had a fair value of P55 per share, but the shares were originally issued at P30 per share. What is the increase in equity as a result of the exchange? Group of answer choices A. 1,800,000 B. 1,600,000 C. 2,200,000 D. 600,000
On December 1, 2018, Ban Company exchanged 40,000 shares of its P10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by Ban at a cost of P40 per share and are accounted for under the cost method. On the date of exchange, the ordinary shares had a fair value of P55 per share, but the shares were originally issued at P30 per share. What is the increase in equity as a result of the exchange? Group of answer choices A. 1,800,000 B. 1,600,000 C. 2,200,000 D. 600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
On December 1, 2018, Ban Company exchanged 40,000 shares of its P10 par value ordinary shares held in treasury for a used machine. The treasury shares were acquired by Ban at a cost of P40 per share and are accounted for under the cost method. On the date of exchange, the ordinary shares had a fair value of P55 per share, but the shares were originally issued at P30 per share. What is the increase in equity as a result of the exchange?
Group of answer choices
A. 1,800,000
B. 1,600,000
C. 2,200,000
D. 600,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education