Question #1Romeo Corporation presented the following balance
sheet for Dec.31,2013:ASSETS
Current Assets30,000
Treasury shares (at market, cost is P15,000)14,000
Fixed Assets56,000
Total Assets100,000
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities20,000
Ordinary shares subscribed (500 shares)10,000
Long term debt8,000
Total liabilities38,000
Ordinary shares (4,000 shares Issued)18,000
10% Preference shares (1,000 shares issued)12,000
Subscription receivable(4,000)
Reserve for depreciation16,000
Accumulated profit20,000
Total Shareholders equity62,000
Total liabilities and shareholders equity100,000
Your investigation of Romeos corporations financial records
indicates that all authorized shares have been either issued or
subscribed. The par values for the ordinary and preference shares
are P2 and P10, respectively. The treasury shares were originally
purchased when the market price was P20 per share. During 2013, 250
Treasury shares were resold for P25 per share. A gain on treasury
share transactions was credited for the difference between the
original cost and the selling price. Furthermore, the excess of
cost over market of the treasury shares at the end of the period
was recognized as an unrealized loss on the 2013 income statement.
You also discovered that a majority stockholder donated during
2013, a land which originally costed the stockholder P5,000 but
with a market value of P9,000 during the date of donation.
Subscription receivable are due six months from December
31,2013.Treasury sharesa. 14,000b. 20,000c. 15,000d. 18,750
Question #2The following data were compiled prior to preparing
the balance sheet of the Garry Corporation as of December 31,
2013:Authorized common stock, P100 par value4,000,000
Cash dividends payable160,000
Donated capital800,000
Gain on sale of treasury stock80,000
Net unrealized loss on available for sale securities96,000
Premium on capital stock320,000
Premium on bonds payable240,000
Reserve for bond sinking fund400,000
Reserve for depreciation600,000
Revaluation increment on property800,000
Retained earnings,unappropriated720,000
Subscribe capital stock480,000
Stock subscriptions receivables120,000
Stock warrants outstanding200,000
Treasury stock, at cost144,000
Unissued common stock800,000
Legal capitala. 3,680,000b. 3,560,000c. 3,200,000d.
4,000,000
Question #3The following data were compiled prior to preparing
the balance sheet of the Garry Corporation as of December 31,
2013:Authorized common stock, P100 par value4,000,000
Cash dividends payable160,000
Donated capital800,000
Gain on sale of treasury stock80,000
Net unrealized loss on available for sale securities96,000
Premium on capital stock320,000
Premium on bonds payable240,000
Reserve for bond sinking fund400,000
Reserve for depreciation600,000
Revaluation increment on property800,000
Retained earnings,unappropriated720,000
Subscribe capital stock480,000
Stock subscriptions receivables120,000
Stock warrants outstanding200,000
Treasury stock, at cost144,000
Unissued common stock800,000
Additional paid-in capital (APIC)a. 1,400,000b. 1,200,000c.
1,320,000d. 320,000Question #4Following is the stockholders equity
section of Vivacious Corporations balance sheet at December 31,
2012:Common stock, P10 par value; authorized 1,500,000shares;
issued and outstanding 900,000 shares9,000,000
Additional paid-in capital750,000
Retained earnings2,700,000
Total stockholders equity12,450,000
Transactions during 2013 and other information relating to the
stockholders equity accounts were as follows:On January 26,
Vivacious reacquired 75,000 shares of its common stock for P11 per
share.
On April 4, Vivacious sold 45,000 shares of its treasury stock
for P14 per share.
On June 1, Vivacious declared a cash dividend of P1 per share,
payable on July 15, 2013 to stockholders of record on July 1,
2013.
On August 15, each stockholder was issued one stock right for
each share held to purchase two additional shares of stock for P12
per share. The rights expire on October 31, 2013.
On September 30, 150,000 stock rights were exercised when the
market value of the stock was P12.50 per share.
On November 2, Vivacious declared a two for one stock split-up
and charged the par value of the stock from P10 to P5 per share. On
November 20, shares were issued for the stock split.
On December 5, 60,000 shares were issued in exchange fora
secondhandequipment. It originally cost P600,000, was carried by
the previous owner at a book value of P300,000, and was recently
appraised at P390,000.
Net income for 2013 was P720,000.
Total stockholders equitya. 16,425,000b. 16,065,000c.
14,295,000d. 16,095,000
Question #5Romeo Corporation presented the following balance
sheet for Dec.31,2013:ASSETS
Current Assets30,000
Treasury shares (at market, cost is P15,000)14,000
Fixed Assets56,000
Total Assets100,000
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities20,000
Ordinary shares subscribed (500 shares)10,000
Long term debt8,000
Total liabilities38,000
Ordinary shares (4,000 shares Issued)18,000
10% Preference shares (1,000 shares issued)12,000
Subscription receivable(4,000)
Reserve for depreciation16,000
Accumulated profit20,000
Total Shareholders equity62,000
Total liabilities and shareholders equity100,000
Your investigation of Romeos corporations financial records
indicates that all authorized shares have been either issued or
subscribed.The par values for the ordinary and preference shares
are P2 and P10, respectively. The treasury shares were originally
purchased when the market price was P20 per share.During 2013, 250
Treasury shares were resold for P25 per share. A gain on treasury
share transactions was credited for the difference between the
original cost and the selling price. Furthermore, the excess of
cost over market of the treasury shares at the end of the period
was recognized as an unrealized loss on the 2013 income
statement.You also discovered that a majority stockholder donated
during 2013, a land which originally costed the stockholder P5,000
but with a market value of P9,000 during the date of
donation.Subscription receivable are due six months from December
31,2013.Total contributed capitala. 50,250b. 41,250c. 98,000d.
40,250
Answers:1. C. 15,0002. A. 3,680,0003. A. 1,400,0004. D.
16,095,0005. A. 50,250
