1.

An entity undertakes an initial public offering for the listing and issuance of 700,000 new shares and listing of 300 old existing old shares.
The entity incurred the ff: documentary stamp tax- 25,000; fairness opinion and valuation report- 125,000; tax opinion-100,000; newspaper
publication-200,000; listing fee- 300,000; other joint cost- 275,000.

a) What is the stock listing fee?

b) What is the issuance cost/ share premium?

2. Ocean company was organized at the beginning of the current year and was authorized to issue share capital of 100,000 shares @ 50 par
value. The incorporators subscribed for 25% of the authorized share capital at par value. The incorporators paid 25% on their subscription. Full
payment was received received on 15,000 shares originally subscribed. Land with fair value of 600,000 was acquired upon issuance of 10,000
shares. The market value of the share this time is P55. Cash subscription to 5,000 shares @60 per share was received. Issued 2,000 shares to
the legal counsel in payment for his bill for organization services. What is the shareholder’s equity?________

3. Lake company was organized at the beginning of the current year and was authorized to issue share capital of 50,000 shares @100 par value.
Received subscription at par value from incorporators equal to 40% of the authorized share capital. Received a 25% downpayment on the
subscriptions from the incorporators. Received full payment on 10,000 shares originally subscribed. A patent was acwuired by issuing 5,000
shares. The patent has no fair value. Received cash subscriptions to 15,000 shares at 120 per share. What is shareholder’s equity?

4. Mara company provided the ff data:

Authorized Share capital 5,000,000

Unissued S/C 2,000,000

Subscribed S/C 1,000,000

Subscription receivable 400,000

Share premium 500,000

Retained earnings unappropriated 600,000

Retained earnings appropriated 300,000

Revaluation surplus 200,00

What is the total shareholder’s equity?

a) 5,200,000 b. 5,500,000 c. 4,900,000 d. 4,800,000

5. Bronze company provided the ff. Data: share capital- 5,000,000; subscribed share capital- 3,000,000; subscription receivable- 2,000,000;
share premium- 1,500,000; cumulative translation loss- 500,000; treasury shares, cost- 700,000; retained earnings- 1,000,000; cumulative
unrealized gain on futures contract designated as cash flow hedge- 600,000.

a) What is the contributed capital?

b) What is the legal capital?

c) What is the total shareholder’s equity?

6. On January 1, 2019, XY company was incorporated with the ff. Authorized capitalization: Ordinary share capital, no, P100 stated value-
20,000,000; preference share capital, 10%, P50 par- 10,000,000. During the year, the entity issued 150,000 ordinary shares for a total of
18,000,000 and 50,000 preference shares at 60 per share. In addition, on December 15, 2019, subscriptions for 20,000 preference shares were
taken at a purchase price of 100. these subscribed shares were paid for on January 15,2020. Net income for 2019 was 5,000,000. What amount
should be reported as total contributed capital on December 31,2019?

7. On January 1, 2019, Ashe company was organized with authorized share capital of 100,000 shares of 200 par value. During the year, the
entity had the ff transactions: January 10, Issued 25,000 shares at 220 a share. March 25, issued 1,000 shares for legal services when the fair
value was 240 per share. September 12, issued 5,000 shares for a tract of land when the fair value was 260 per share. What is the share
premium on 12/31/19?
8. East company issued 1000 shares with 5 par value to Howe as compensation for 1000 hours of legal services performed. Howe usually bills
160 per hour for legal services. On the date of issuance, the share was trading on a public exchange at 140. What amount did the share
premium account increase as a result of transaction?

9. At the beginning of the current year, Cove Company, a closely held entity, issued 6% bonds with a maturity value of 6,000,000 together with
10,000 ordinary shares of 50 par value, for a combined cash amount of 11,000,000. if the bonds were issued separately, they would have sold
for 4,000,000 on an 8% yield to maturity basis. What amount should be reported for the share premium on the issuance of the ordinary
shares?

10. Ramington Company issued 10000 ordinary shares with 200 par value and 20000 preference shares with 200 par value for a total
consideration of 8,000,000. At the date of issuance, the ordinary share was selling for 360 and the preference shares was selling for 270.

a) What amount of proceeds should be allocated to the preference shares?

b) What amount of proceeds should be allocated to the ordinary shares?

c) What is the share premium from the issuance of preference shares?

d) What is the share premium from the issuance of the ordinary shares?

11. Orlando company issued 8000 convertible preference shares with 100 par value at 105 per share. One preference share can be converted
into three ordinary shares with 25 par value at the option of shareholder. Subsequently, all the preference shares were converted into
ordinary shares. The market value of the ordinary shares on the date of conversion was 30. What amount should be credited to share premium
as a result of the issuance of the preference shares and the subsequent conversion into ordinary shares?

12. During the current year, company issued for 110 per share, 15,000 convertible preference of 100 par value. One preference share may be
converted into three ordinary shares with 25 par value at the option of the preference shareholder. All of the preference share were converted
into ordinary shares at year-end. The market value of the ordinary shares at the conversion date was 40.

a) What amount should be credited to ordinary share capital as a result of the conversion at year-end?

b) What amount should be credited to share premium as a result of the conversion at year-end?

13. Nerve company was organized on January 1, 2019. On that date, the entity issued 200,000 P10 par value shares at 15 per share. During the
period January 1, 2019, through December 31, 2019, the entity reported a net income of 750,000 and paid cash dividends of 380,00. On
January 5, 2020, the entity purchased 12,000 treasury shares at 12 per share. On 12/31/20, 8,000 of treasury shares were sold at 8 per share
and retired the remaining 4,000 shares. What is the shareholder’s equity on 12/31/20?

14. Caper company disclosed the ff information: Share capital, par value 20 authorized- 50,000 shares, issued and outstanding- 30,000,
P600,000; share premium- 150,000; retained earnings- 230,000. During the year, 1,000 shares were reacquired at 28 per share; 900 shares
were reacquired at 30 per share; 1500 shares of treasury shares were sold at 32 per share. The net income for the year is 110,000. What
amount should be reported as shareholder’s equity at year-end?

15. At the beginning of the current year, Door Company approved a 2-for-1 split of the entity’s share capital, and an increase in authorized
shares from 100,000 P20 par value shares to 200,000 P10 par value shares. The shareholder;s equity accounts immediately before issuance of
the share split were as follows: share capital, par value P20, 50000 shares outstanding, P1,000,000; share premium, P3 per share on issuance-
150,000; retained earnings- 1,350,000. What should be the balance in the share premium and retained earnings accounts immediately after
the share split is effected?

16. Company authorized at the beginning of current year with 1,200,000 ordinary shares with a par value of P6 per share. January 5, issued
675,0000 shares at 10 per share; July 1, purchased 90,000 treasury shares at P11 per share; December 31, sold the 90,000 shares held in
treasury shares at 18 per share. The entity used cost method to record the purchase and reissuance of treasury shares. What is the share
premium at year-end?
17. At the beginning of the current year, alto company declared a 1-for-5 reverse share split when the market value of share was 100. Prior to
the split, the entity has 10,000 shares of 10 par value issued and outstanding. What is the par value of share after the share split?

18. Beck company issued 200,000 ordinary shares when it began operations in 2017 and issued an additional 100,000 ordinary shares in 2018.
The entity also issued preference shares convertible to 100,000 ordinary shares. In 2019, the entity purchased 75,000 ordinary shares and held
as treasury. On December 31,2019, how many shares were outstanding?

19. January 1, number of shares authorized-100,000; number of shares issued-80,000; number of shares reacquired but not canceled-10,000.
December 1, 2-for-1 share split. What is the number of ordinary shares outstanding at year-end?

20. Rona Company originally issued 5,000 shares of 10par value for 100 per share. During the current year, the entity acquired 2,000 of the
shares at 150 per share and immediately canceled these 2,000 shares. In connection with the retirement of shares, what amount is debited to
share premium and retained earnings?

21. Berna Company reported the following : Share capital, P20 par- P8,000,000; Share premium- 2,550,000; retained earnings- 1,275,000. All
shares outstanding at the beginning of the current year were issued at 26 per share. At year-end the entity reacquired 20,000 shares at 24 a
share and retired them. What is the balance of share premium?

22. Vicar company was organized at the beginning of the current year with 100,000 authorized shares of 100 par value. During the current year,
the entity issued 75,000 shares at 140 per share. At year-end, the entity purchased 5,000 shares at 110 per share. The par value method was
used to records purchase of treasury shares. What is the balance of share premium from treasury shares at year-end?

23. Pack company canceled 5000 shares of 50 par value held in treasury shares at an average of 120 per share. Before recording the
cancellation of the treasury shares, the entity had the following shareholder’s equity: share capital, 50,000 shares originally issued at 75-
2,500,000; share premium- 1,250,000; retained earnings- 1,000,000; treasury shares, at cost- 600,000. What amount should be reported for
the following after cancellation of treasury shares.

a) Share capital

b) Share premium

c) Retained earnings

24. Hannah company reported the following: share capital P10 par, outstanding 225,000 shares- 2250,000; share premium- 1,500,000;
retained earnings-2,000,000. During the year, the company acquired 10,000 treasury shares for 500,000. Sold 5,000 treasury shares at 60 per
share. Sold 2,000 treasury shares at 45 per share.

a) What is the total amount of share premium at year-end?

b) What is the share capital at year-end?

c) What is the total shareholder’s equity?

25. At the beginning of the current year, company was authorized t issue 100,000 shares with 50 par. During the year, issued 10,000 shares at
70 per share. Issued 20,000 shares at 80 per share. Reported net income of 1,000,000. paid cash dividend of 200,000. purchased 3,000
treasury shares at 100 per share.

a) What amount should be reported as share capital at year-end?

b) What amount should be reported as share premium at year-end?

c) What is the total shareholder’s equity?

d) What is the contributed capital at year-end?

26. Levi company reported the following

2020 2019

Share capital, 5 par 7,500,000 4,500,000

Share premium 52,000,000 40,000,000

Retained earnings 19,500,000 15,500,000

 Treasury shares at cost, 600,000 in 2020 and 7,000,000 5,000,000
400,000 in 2019

a) What is the number of outstanding shares on 12/31/20?

b) What is the number of outstanding shares on 12/31/19?

c) How many shares were issued during 2020?

d) What was the average price of additional shares issued in 2020?

27. In 2019, company bought 10,000 shares of oil company at a cost of 200,000. On December 1, 2019 company declared a property dividend
of the oil company shares to shareholders of record on February 1, 2020, payable Feb. 15, 2020. The oil company shares had the following
market values: 12/1/19- 250,000; 12/31/19- 260,000; 2/15/20- 240,000. What is the net charge of the property dividend against retained
earnings during 2019?

28. During 2019, Ray company reported the following cash dividends on the P10 par value share capital: 1st quarter- 800,000; 2nd quarter-
900,000; 3rd quarter- 1,000,000; 4th quarter- 1,100,000. The 4th quarter cash dividend was declared on December 20,1019 to shareholders of
record December 31, 2019 payable on January 31,2020. In addition, the entity declared a 10% share dividend on 12/1/19 when there were
300,000 shares issued and outstanding and the market value was P25 per share on the declaration date and 30 distribution date.

a) What amount was charged against retained earnings for the dividends?

b) What amount was credited to share capital for the share dividend?

c) What amount was credited to share premium for the share dividend?

29. Solace company declared and distributed 10%share dividend with FV of 1,500,000 and par value of 1,000,000 and 25% share dividend with
FV of 4,000,000 and par value of 3,500,000. What aggregate amount should be debited to retained earnings for the share dividend?

30. Sol Company declared a 10% share dividend. The market price of the 30,000 outstanding shares at 20 par was P90 per share on declaration
date. When the share dividend was distributed, the share market was 100. What amount should be credited to share premium for the share
dividend?

31. During the year, Grey company issued 4000 shares with 100 par value in connection with a share dividend. The market value per share on
the date of declaration was 150. The shareholder’s equity before issuance of the share dividend was as follows:

Share capital, 100 par, 20000 shares outstanding 2,000,000

Share premium 3,000,000

Retained earnings 1,500,000

What is the retained earnings balance immediately after the share dividend?

32. Sydney Company reported the following capital accounts at the year-end: Share capital, par 35, authorized 150,000 shares, 55000 shares
issued of which 5000 shares are in treasury- 1375000; retained earnings- 2,000,000; treasury shares at cost- 150,000. The share was selling at
40 at this time. A 100% share dividend was declared and that all the treasury shares were issued as share dividend and the balance from the
unissued shares. What amount of retained earnings should be capitalized?

33. The directors of Ontario Company whose 50 par value share capital is currently selling at 60 per share have decided to issue a share
dividend. The selling price is not expected to be affected by the share dividend. The entity which has an authorization for 1,000,000 shares had
issued 50,000 shares of which 100000 shares are now held as treasury. The entity capitalized 2,400,000 of the retained earnings balance. What
percentage was declared as a share dividend by the directors?

34. Katrina Company reported the following shareholder’s equity at the beginning of the current year: Share capital, 250,000 shares
authorized, 30 par, 100,000 shares issued and outstanding- 3,000,000; share premium- 4,000,000; retained earnings- 8,000,000. the board of
directors declared a 10% share dividend on April 1 when the market value of the share was 70. the share dividend was issued on July 1 when
the market value of the share was 100. the entity sustained a net loss of 1,200,000 for the current year. What amount should be reported as
retained earnings at year-end?

35. Kiara Company provided the ff. Shareholders equity at year-end:

2019 2020

Share capital (100 par value) 5,000,000 5,100,000

Share premium 2500,000 2,900,000

Retained earnings 5,000,000 ?

During 2020, the entity declared and paid cash dividend of 750,00 and also declared and issued a share dividend. There were no other changes
in shares issued and outstanding during 2020. the net income for 2020 was 1,500,000. what amount should be reported as retained earnings
on December 31,2020?

36. Beauty Company provided the ff information:Preference shares, 500 par value, 2200 shares-- 1,100,000; Treasury shares, 100 shares at
cost-- 110,000; Ordinary Share Capital, no par, 3000 shares at issue price-- 600000; Retained Earnings-- 2,500,000. The board of directors
resolved to pay a 100% share dividend on all shares outstanding capitalizing amounts of retained earnings equal to the par value and the issue
price of the preference and ordinary shares outstanding respectively. Subsequently, the BOD resolved to pay cash dividend of 10% on
preference share and a cash dividend of 10 per ordinary share. What is the shareholder’s equity after affecting the dividend transactions?

37. At the beginning of the current year, Coleen Company had 220,000, 5 par value shares outstanding. On June 1, the entity acquired 20,000
shares to be held as treasury. One December 1, when the market price of the share was 20, the entity declared a 10% share dividend to be
issued to shareholders to record on December 15. What was the decrease of share dividend on retained earnings?

38. Gem Company reported the following at the beginning of the current year: Share Capital,20 par, authorized 200,000 shares, issued and
outstanding 100,000 shares-- 2,000,000; Share Premium-- 3,000,000; Retained Earnings-- 7,500,000. On March 1, the BOD declared a 15%
share dividend, and accordingly 15,000 additional shares were issued. On March 1, the Fair Value of the share was 60. The entity sustained a
net loss of 1,000,000 for the current year. What amount should be reported as retained earnings at year-end?

39. At the beginning of the current year, Flash Company had retained earnings of 4,000,000. During the year, the entity reported net income of
2,000,000, sold treasury shares at a gain of 720,000, declared cash dividend of 1,200,000 and declared and issued a small share dividend of
60,000 shares with 10 par value when the fair value of the share was 20. What is the amount of retained earnings available for dividends at the
end of the current year?

40. Kremlin Company reported the ff at year end: Share Capital, 50 par value--3,000,000; Share premium-- 600,000; Retained Earnings--
4,200,00. A 15% share dividend was declared and distributed at year-end when the entity’s share was selling at 65. What amount should be
reported as share capital outstanding?

41. On January 1,2020, the BOD of Blake Company declared a cash dividend of 800,000 to shareholders of record on January 15,2020, and
payable on February 15,2020. The entity reported the ff on December 31,2019: Accumulated Depletion--500,000; Share Capital--9,000,000;
Share Premium-- 300,000; Retained earnings- December 31,2019-- 600,000; Net Income for 2019-- 150,000. What amount should be reported
as liquidating dividend?

42. Dayron Company had 80,000 ordinary shares outstanding in January of current year. The entity distributed a 15% share dividend in March
and a 10% share dividend in June. After acquiring 10,00 shares of treasury in July, the entity split the share 4 for 1 in December. How many
ordinary shares are outstanding at year end?

43. Rudd Company had 700,000 ordinary shares authorized and 300,000 shares outstanding at the beginning of the current year.