Treasury stock is a(n)

Select one:
A. asset account
B. liability account
C. contra equity account
D. none of the above
Question text
EFG reported the following on its December 31, 2015, statement of financial position; ordinary
shares, no par, P200,000; unappropriated retained earnings, P25,000; appropriation of retained
earnings for bond sinking fund, P10,000; and reserve for possible future inventory losses,
P5,000. Therefore, the last line on the retained earnings statement, total appropriated and
unappropriated retained earnings should be:

Select one:
A. P55,000
B. P40,000
C. P15,000
D. P10,000
Question text
Which of the following is not true about treasury stock?

Select one:
A. Shares held as treasury stock include shares that has been retired or cancelled
B. Shares held as treasury stock has no voting right
C. Shares held as treasury stock are not entitled to assets upon liquidation
D. Shares held as treasury stock are not entitled to dividends
Question text
A person who purchases preferred stock of a corporation is known as:

Select one:
A. preferred creditor
B. preferred stockholder
C. preferred owner
D. preferred investor
How much is Southern’s Shareholders’ Equity after the reacquisition of 2,500 shares in 2018?

3385000
Answer:

Question text
Evie Corporation had 100,000 ordinary shares issued and outstanding on January 1,
2019. During 2019, the following transactions occurred:
March 15 - declared 2-for-1 share split when the fair market value of the shares was P80.00 per
share.
December 15 - declared P0.50 per share cash dividend.
In Evie's statement of changes in shareholders' equity for 2019, what amount should Evie report
as dividends?
180000
Answer:

Question text
What is the purpose of a share split?
Select one:
A. To adjust the market price of the corporation's shares to a level where more individuals
can afford to invest in the stock.
B. To spread shareholder based by increasing the number of outstanding shares.
C. To decrease the number of shares outstanding thereby increasing proportionately the par
value.
D. Both A and B.

Question text
Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par
ordinary shares. During 2019, the entity had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Under international financial reporting standard (IFRS), how much share premium in recorded
by Evie Corporation on January 14?
120000
Answer:

Question text
Reissuing treasury stock at a price below cost results in

Select one:
A. A loss which is a direct deduction to retained earnings.
B. A loss which is charge to retained earnings if there is no premium from treasury.
C. A loss to be reported as a separate item in the Income Statement.
D. A loss which gives a restriction of retained earnings.

Question text
Evie Corporation's outstanding shares at December 31, 2019 consisted the following:
30,000 shares of 5% cumulative preference shares, P10 par value, fully participating as to
dividends. No dividends were in arrears.
200,000 ordinary shares, P1 par value.
On December 15, 2016, Evie declared dividends of P100,000. What was the amount of
dividends payable to preference shareholders?

Answer:

Question text
The primary source of stockholders equity is

Select one:
A. both income retained by the corporation and contributions by stockholders.
B. income retained by the corporation.
C. appropriated retained earnings.
D. contributions by stockholders.

Question text
Which of the following statements is not true about preference shares?

Select one:
A. Stockholders' usually have a preference as to dividends
 B. The rate of dividend is usually fixed
C. Stockholders' usually have a preference as to assets upon liquidation of the corporation
D. Stockholders always have a voting right

How much is Southern’s Shareholders’ Equity after the reissuance of 2,000 treasury shares in
2018?

3450000
Answer:

Treasury shares are

Select one:
A. issued but not outstanding shares.
B. shares held as an investment by the treasurer of the corporation.
C. shares held as an investment of the corporation.
D. issued and outstanding shares.

A corporation is managed by its __________.

Select one:
A. Partners
B. Auditor
C. Board of Directors
D. None of these
Evie Corporation was organized on January 1, 2014 at which date it issued 100,000 shares of
P10 par ordinary shares at P15 per share. During the period January 1 to December 31, 2016,
Evie reported profit of P450,000 and paid cash dividends of P230,000. On January 10,2 016,
Evie purchased 6,000 shares of its ordinary shares at P12 per share. On December 31, 2016,
Evie sold 4,000 treasury shares at P8 per share and retired the remaining treasury shares. What
is Evie's total shareholders' equity at December 31, 2016?
Select one:
A. P1,680,000
B. P1,704,000
C. P1,720,000
D. P1,688,000

The cost of treasury stock is deducted from total share capital and retained earnings in
determining total shareholders' equity.
Select one:
True
False

Select one:
A. P8,750,000
B. P7,250,000
C. P8,600,000
D. P7,100,000

Question text
1st Statement: Organization cost is recorded as an asset.
2nd Statement: When ordinary shares with par value are sold, the proceeds should be credited to
the ordinary shares account in full.

Select one:
 A. Only the second statement is correct.
B. Only the first statement is correct.
C. Both statements are incorrect.
D. Both statements are correct.

Select one:
A. P16,000
B. P20,000
C. P60,000
D. P0

Question text
Statement 1: The balance in the Share Premium account must be added tot he balance of the
Ordinary Shares account to compute the amount of legal capital for a corporation with a par
value ordinary shares.
Statement 2: If share capital is issued for non-cash consideration, the proceeds is recorded at an
amount equal to the following in the order of priority: (1) fair market value of share capital
issued, (2) fair market value of non-cash consideration received, and (3) par or stated value of the
share capital issued.
Select one:
A. Both statements are incorrect
B. Both statements are correct.
C. Only the first statement is correct
D. Only the second statement is correct
Question 22
Question text
Which of the following represents the total number of shares that a corporation may issue under
the terms of its Articles of Incorporation?

Select one:
A. authorized shares
B. unissued shares
C. issued shares
D. outstanding shares

Question text
Evie Corporation has issued 200,000 shares of P1 par value ordinary shares at P15. it is
repurchases 5,000 shares during 2019 at P20
Select one:
A. profit would decrease by P100,000
B. shareholders' equity would decrease by P25,000
C. shareholders' equity would decrease by P100,000
D. profit would decrease by P25,000

Question text
Gains on sales of treasury stock using the cost method should be credited to

Select one:
A. Share premium from treasury stock.
B. other income
C. capital stock.
D. retained earnings.

The sale of treasury stock at an amount greater than cost results in a gain to be reported on the
statement of recognized income and expense.
Select one:
True
False
Question text
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10
par value ordinary shares. The shares will be issued on July 8, 2016. The market price of Evie
Corporation stock is P15 per share on June 25, and July 8, 2016, the shares were selling at P12
per share. On July 8, 2016, the share premium account is credited for
Select one:
A. P200,000
B. P300,000
C. P0
D. P600,000

Question text
Evie Corporation’s performance during the last there years had not been favorable resulting to a
deficit of P950,000 at December decided to eliminate the deficit through a quasi-reorganization
which would be effected follows: The company’s 200,000. P20 Par ordinary share capital
originally issued at an average price of P22 would be reissued with par value of
P15. Immediately after quasi-reorganization, what would be the balance of share premium?

Select one:
A. P1,000,000
B. P450,000
C. P600,000
D. P1,400,000

The purchase of treasury stock will result in

Select one:
A. a decrease in one asset account and an increase in a different asset account
B. a decrease in assets and a decrease in liabilities
C. a decrease in assets and decrease in shareholders' equity
D. no changes in assets, liabilities, and shareholders' equity

Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following
transactions took place during 2017, the first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.
At the end of Fern’s first year, total share premium from ordinary shares amounted to

190000
Answer:
Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par
ordinary shares. During 2019, the entity had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Assume Evie Corporation records treasury stock at cost. The entry to record the reissuance of
the 5,000 treasury shres on December 5 would include credit to

Select one:
A. Treasury stock in the amount of P95,000
B. retained earnings in the amount of P15,000
C. Share premium in the amount of P15,000
D. gain on sale in the amount of P15,000

Question text
1st Statement: All incorporators are shareholders but not all shareholders are incorporators.
2nd Statement: The authorized shares represent the maximum number of shares that a
corporation may issue.

Select one:
A. Only the second statement is correct.
B. Both statements are correct.
C. Only the first statement is correct.
D. Both statements are incorrect.

Question text
Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following
transactions took place during 2017, the first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.
At the end of Fern’s first year, legal capital amounts to

190000
Answer:

Question text
Evie Corporation has 200,000 shares of P10 par value ordinary shares outstanding on December
31, 2015. On January 2, 2016, Evie declared a share divided of 10,000 shares when the fair
market value is P18. On the date of record, February 3, 2016, the share price is P15. The shares
are issued on March 1, 2016 when the market value of the shares is P25.
When recording the journal entry to declare the share dividend, Evie will credit share premium
of
Select one:
A. P150,000
B. P80,000
C. P50,000
D. P100,000

The excess price received on the par value of ordinary shares should be credited to __________.
Select one:
A. Subscriptions Receivable
B. Ordinary Shares
C. Share Premium
D. None of these

Question text
At the end of the accounting year, December 31, 2019, Evie’s records reflected the following:
Ordinary shares, no par, 5,000 shares issued, issued price P12 per share
Preference shares, par P5, 1,000 shares issued and outstanding; issue price, P15 per share
Unrealized gain, securities available for sale, P18,000
Retained earnings, P20,000 (unappropriated)
Preference shares, par P5, subscribed (not yet issued), 400 shares; subscription price P20 per
share
Subscriptions receivable on the preference shares P5,000 to be collected on January 1, 2020
Reserve for bond sinking fund, P15,000
Treasury shares, ordinary shares, 1000 shares, cost P10 per share.
Total shareholders’ equity is:

Select one:
A. P121,000
B. P120,000
C. P125,000
D. P126,000
E. P136,000

Which of the following cannot be a component of stockholders’ equity section of the balance
sheet?

Select one:
 A. Retained earnings
B. Long term loan
C. Treasury stock
D. Additional paid-in capital

Question text
In case of no-par shares, legal capital is the total consideration received by the corporation for
the issuance of its shares to the shareholders but this would necessarily exclude the excess of
issue price over the stated value.
Select one:
True
False

Which of the following best describes a possible result of treasury stock transactions of a
corporation?

Select one:
A. May increase but not decrease retained earnings.
B. May decrease but not increase retained earnings.
C. May decrease but not increase net income.
D. May increase net income if the cost method is used.

Question text
1st Statement: The owners of a stock corporation are called shareholders; the owners of a non-
stock corporation are called members.
2nd Statement: Share premium for the excess of the stock subscription price over its par value or
stated value is recorded at the time full payment of subscription price is received by the
corporation.

Select one:
A. Both statements are correct.
B. Both statements are incorrect.
C. Only the second statement is correct.
D. Only the first statement is correct.
On April 15, 2020, Evie Corporation splits its ordinary shares 5-for-1 when the market value was
P100 per share. Prior to the split, Evie had 10,000 shares of P10 par value ordinary shares issued
and outstanding. After the split, the par value of the share
Select one:
A. was reduced to P8
B. remained at P10
C. was reduced to P5
D. was reduced to P2

Question text
Which of the following statements is false?

Select one:
A. A corporation has an enforceable contract with its shareholders in the declaration date of
a cash dividend.
B. When a company issues to its shareholders some shares of another corporation that
currently are held as an investment, the company is issuing a share dividend.
C. A formal declaration of as cash or property dividend constitutes an enforceable contract
between the corporation and the shareholders.
D. Property dividends are dividends that the corporation distributes on the form of noncash
assets.

Question text
Evie Corporation issued 20,000 shares of P5 par ordinary shares at P10 per share. On December
31, 2019, Evie's retained earnings were P300,000. In March 2020, Evie reacquired 5,000 shares
of its ordinary shares at P20 per share. In April 2020, Evie sold 1,000 of the treasury shares to
its corporate officers for P25 per share. Profit for the year 2020 was P60,000. At December 3,1
2020, Evie should report Retained Earnings at
Answer:

Sometime companies buyback their own shares which are known as:

Select one:
A. treasury stock
B. acquired stock
C. holding stock
D. common stock
Question text
For a corporation type of business, total assets on a balance sheet prepared on any date must
agree with which of the following?

Select one:
A. The sum of total liabilities and net income as shown on the income statement
B. The sum of total liabilities and contributed capital and retained earnings
C. The sum of total liabilities and contributed capital
D. The sum of total liabilities and contributed capital

Question text
Persons whose names are written in the articles of incorporation are called

Select one:
A. Corporators
B. Incorporators
C. Promoters
D. Subscribers

Question text
Southern Company was organized on January 1, 2018 with authorized capital of P2,000,000
consisting of 100,000 ordinary shares, P20 par value. Subsequently, incorporators subscribed for
25,000 shares at P24. How much must be paid up upon subscription to comply with the
requirement of the Securities and Exchange Commission?

Answer:

Question text
Evie Corporation's outstanding shares at December 31, 2019 consisted the following:
30,000 shares of 5% cumulative preference shares, P10 par value, fully participating as to
dividends. No dividends were in arrears.
200,000 ordinary shares, P1 par value.
On December 15, 2016, Evie declared dividends of P100,000. What was the amount of
dividends payable to ordinary shareholders?
Answer:
Question text
_________ is the first stage in the formation of a corporation.

Select one:
A. Capital Subscription
B. Incorporation
C. Commencement
D. Promotion

Question text
A person who purchases ordinary shares of a corporation is known as:

Select one:
A. creditor
B. bond holder
C. preferred stockholder
D. ordinary stockholder

In 2019, Evie Corporation issued 5,000 shares of P10 par value ordinary shares for P100 per
share. In 2020, Evie reacquired 2,000 of its shares at P150 per share from the estate of one of its
deceased officers and immediately canceled/retired these 2,000 shares. In connection with the
retirement of these 2,000 shares, Evie should debit Retained Earnings for
Select one:
A. P280,000
B. P100,000
C. P180,000
D. P0

Southern Company issued 100,000 shares of P10 par common stock for P1,200,000. Southern
reacquired 8,000 previously issued shares at P15 per share. Three months later Southern sold
4,000 of the treasury shares at P19 per share. If the cost method is used to record treasury stock
transactions; to record the sale of the 4,000 treasury shares; Southern should credit

Select one:
A. Treasury Stock for P76,000.
B. Treasury Stock for P60,000 and Share premium, P16,000
 C. Treasury Stock for P40,000 and Share premium – Treasury for P36,000
D. Treasury Stock for P60,000 and Share premium – Treasury for P16,000

Question text
The following information is available for Evie Corporation: Ordinary shares, P80,000 (P80
par); Share Premium, P200,000; and Retained earnings, P400,000. Assuming only one class of
share, the book value of share is
6200000
Answer:

Question text
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10
par value ordinary shares. The shares will be issued on July 8, 2016. The market price of Evie
Corporation stock is P15 per share on June 25, and July 8, 2016, the shares were selling at P12
per share. The journal entry to record the declaration of the share dividend on June 25, 2016 will
include a
Select one:
A. debit to retained earnings P600,000
B. debit to retained earnings P900,000
C. credit to share premium, P300,000
D. credit to share premium, P200,000

Question text
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares -
P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160
per share. The shares were issued on April 15, 2019 when the shares were selling at P180 per
share. For the four months ended April 30, 2019, Evie sustained a net income of P320,000. The
total shareholders' equity of Evie at March 31, 2019 should be

Answer:

Question text
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares -
P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160
per share. The shares were issued on April 15, 2019 when the shares were selling at P180 per
share. For the four months ended April 30, 2019, Evie sustained a net income of P320,000. The
balance of retained earnings of Evie at March 31, 2019 should be

Answer:

Question text
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10
par value ordinary shares. The shares will be issued on July 8, 2016. The market price of Evie
Corporation stock is P15 per share on June 25, and July 8, 2016, the shares were selling at P12
per share. The journal entry on June 25, 206, will include a credit to ordinary shares distributable
in the amount of
Select one:
A. P200,000
B. P600,000
C. P300,000

Question text
Evie Corporation declared the regular quarterly dividend of P2.00 per share. Evie had issued
12,000 ordinary shares and subsequently reacquired 2,000 shares as treasury stock. what would
the total amount of dividends to be distributed?
20000
Answer:

When treasury stock is purchased for more than the par value of the stock and the cost method is
used to account for treasury stock; what accounts should be debited?

Select one:
A. Treasury stock for the purchase price.
B. Treasury stock for the par value and paid in capital in excess of par for the excess of the
purchase price over the par value.
C. Paid in capital in excess of par for the purchase price.
D. Treasury stock for the par value and retained earnings for the excess of the purchase price
over the par value.
The liability of shareholders of a corporation is __________.

Select one:
A. Limited to his/her contribution
B. Unlimited and may extend to his/her personal assets
C. Uncertain
D. All of the above

Which of the following statements is incorrect?

Select one:
A. A share split results in the reduction of the par or stated value per share and a proportional
increase in the number of shares outstanding.
B. A reverse share split increases the number of shares outstanding
C. When rights are issued to current shareholders, it may require more than one such right to
later acquire one additional share covered by the rights.
D. In a share split, only the content of contributed capital is changed, whereas in a share
dividend the amount of contributed capital is changed.

Question text
Evie Corporation has 10,000 shares of 7% P50 par preference shares, and 100,000 shares of P4
par ordinary shares outstanding. Two years' preference dividends are in arrears. Evie declared
cash dividend large enough to pay the preference dividends in arrears, the preference dividends
for the current period, and a P1.50 dividend to ordinary. What is the total amount of dividends to
be paid by Evie Corporation?
Select one:
A. P105,000
B. P220,000
C. P150,000
D. P255,000

Question text
On May 1, 2019, Evie Corporation declared and issued a 10% ordinary share dividend. Prior to
this dividend, Evie had 100,000 shares of P1 par value ordinary shares issued and
outstanding. The fair market value of Evie's ordinary shares was P30 per share on May 1,
2019. As a result of the share dividend, Evie's shareholders' equity
Select one:
A. did not change
 B. decreased by P300,000
C. decreased by P10,000
D. increased by P300,000

Select one:
A. P4,725,000
B. P9,130,000
C. P9,450,000
D. P9,310,000

If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously
acquired for P280 per share and there wasn't any Share Premium - Treasury, it would debit
Select one:
A. Share premium - ordinary for P8,000
B. Retained earnings for P8,000
C. Treasury Stock for P8,000
D. Loss on sale of treasury stock, P8,000
Southern Company acquired 6,000 shares of its ordinary shares that were previously issued at
P20 per share on February 5, 2018. It sold 3,000 of these shares at P27 per share on April 1,
2018. The cost method is used to record treasury stock transactions. What accounts should
Southern credit in 2018 to record the sale of 3,000 treasury shares

Select one:
A. Treasury Stock for P60,000 and Share premium – Treasury for P21,000.
B. Treasury Stock for P72,000 and Retained Earnings for P9,000.
C. Treasury Stock for P60,000 and Retained Earnings for P21,000.
D. Treasury Stock for P81,000.

Select one:
A. P1,220,000
B. P1,140,000
C. P1,116,000
D. P1,160,000

Which of the following statements is true?

Select one:
A. Courts generally have held that, in the absence of fraud or illegality, formal
announcement of the declaration of a cash, property, or scrip dividend constitutes an enforceable
contracts (irrevocable declaration) between the corporation and the shareholders.
 B. In accounting for dividends, the declaration date is the most important date because
dividends are paid to whomever owns the shares on that date.
C. Dividends in arrears on cumulative preference shares constitute a liability to the
corporation that should be recorded (accrued)
D. A small share dividend is defined as a dividend which increases the number of
outstanding shares by 10 percent or less.

Question text
On September 1, 2017, Southern Company reacquired 12,000 shares of its P10 par value
ordinary shares for P15.00 per share. Jade uses the cost method to account for treasury
stock. The journal entry to record the reacquisition of the stock should be a debit

Select one:
A. Treasury Stock for P180,000.
B. Ordinary Shares for P120,000
C. Ordinary Shares for P120,000 and Share Premium for P60,000.
D. Treasury Stock for P120,000.

Question text
If share capital is issued for an outstanding liability, the fair market value of the share capital
issued should be the measure for recording.
Select one:
True
False

Question text
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares -
P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160
per share. The shares were issued on April 15, 2019 when the shares were selling at P180 per
share. For the four months ended April 30, 2019, Evie sustained a loss of P320,000. The
balance of retained earnings of Evie at March 31, 2019 should be
1140000
Answer:
Question text
The Southern company issued 5,000 shares of its P10 par value common stock. These shares
were issued at a price of P25 per share. The correct journal entry to record this transaction is:

Select one:
A. Common stock P50,000 Dr; Share Premium - Ordinary Shares P75,000 Dr; Cash
P125,000 Cr.
B. Cash P125,000 Dr; Ordinary Shares P50,000 Cr; Share Premium - Ordinary Shares
P75,000 Cr.
C. Cash P50,000 Dr; Ordinary Shares P50,000 Cr.
D. Cash P125,000 Dr; Common stock P125,000 Cr.

Question text
At December 31, 2015 and 2016, Evie Corporation had outstanding 2,000 shares of P1,000 par
value, 6% cumulative preference shares and 10,000 shares of P100 par value ordinary shares. At
December 31, 2015, dividends in arrears on the preference shares were P60,000. Cash dividends
declared in 2016 totalled P220,000. What amount of dividends were payable to preference
shareholders?
Answer:

Question text
When preference shareholders have the right to receive a specified dividend an to receive more
after a matching dividend percentage is given to ordinary shareholders, the preference shares are
said to be
Select one:
A. callable
B. convertible
C. cumulative
D. participating
Feedback
Your answer is correct.

Evie Corporation's statement of financial position reported the following shareholders' equity:
5% cumulative preference shares, P100 par, 2,500 shares issued and outstanding - P250,000
Ordinary shares, P3.50 par, 100,000 shares issued and outstanding, P350,000
Share premium ordinary - P125,000
Retained earnings - P300,000
Dividends in arrears on the preference shares amounted to P25,000. If Evie were to be
liquidated, the preference shareholders would receive par value plus a premium of P50,000. The
book value per share of ordinary shares is
Select one:
A. P7.25
B. P7.00
C. P7.50
D. P7.75

Participating preference share means that

Select one:
A. Ordinary shareholders receive the dividend rate per share equal to the preference share
and all excess dividends are given to the ordinary shareholder.
B. Ordinary shareholders receive a dividend rate per share equal to the preference share and
all excess dividends are shared proportionately between the two classes.
C. Ordinary shareholders receive a dividend rate per share equal to the preference share and
all excess dividends go to the preference shareholders.
D. Preference shareholders receive their full dividend and any excess is given to the ordinary
shareholders.

The total issue price of preference shares is:

2400000
Answer:

Evie Corporation has a total shareholders' equity of P1,000,000 including retained earnings of
P190,000. The cash balance is P350,000. The maximum cash dividend the corporation can
declare and pay is
350000
Answer:
 3460000
Answer:

Evie Corporation has 700,000 ordinary shares authorized and 300,000 shares outstanding at
December 3,1 2018. The following events occurred during 2019:
January 31 - declared 10% bonus issue.
June 30 - purchased 100,000 shares.
August 1 - reissued 50,000 shares.
November 30 - declared 2-for-1 share split.
At December 31, 2019, how many outstanding shares did Evie have?
450000
Answer:

On April 10, 2018, Southern Company issued 2,000 shares of its P10 par value ordinary shares
in exchange for a piece of land to be held for future plant site. Southern Company’s ordinary
shares has a fair market value of P27 per share on April 10. The land has no known market
value. How much is the increase in ordinary shares premium resulting from this exchange?

34000
Answer:

What does an appropriation of retained earnings and a declaration of cash dividend (for the same
amount) have in common?

Select one:
A. Both permanently reduce future ability to pay dividends
B. Both increase the amount of appropriated retained earnings.
C. Both have the same consequences for shareholders.
D. Both result in a decrease in unappropriated retained earnings.
Question text
In January 2017, ; Southern Company a newly formed corporation issued 10,000 shares of its
P10 par common stock for P15 per share. On July 1, 2017, Southern Company reacquired
1,00o shares of its outstanding stock for P12 per share. The acquisition of these shares

Select one:
A. increased total stockholders’ equity.
B. did not change total stockholders’ equity.
C. decreased total stockholders’ equity.
D. decreased the number of issued shares.

Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par
ordinary shares. During 2019, the entity had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Evie uses the cost method to account for its treasury share transactions. How much is debited to
treasury stock on July 28, 2019?

64000
Answer:

In a corporate form of business organization, legal capital is best defined as

Select one:
A. the amount of capital the federal government allows a corporation to generate.
B. the par value of all capital stock issued.
C. the amount of capital the state of incorporation allows the company to accumulate over its
existence.
D. the total capital raised by a corporation within the limits set by the Securities and
Exchange Commission.

Evie Corporation has 5,000,000 ordinary shares and 1,000,000 shares of 6%,P100 par value
cumulative preference shares. During the recession of the past two years, Evie suspended all
dividend payments. This year, Evie returned to profitability and the board of directors declared a
P1.00 dividend per share to ordinary shareholders to be paid at the end of the year. How much
would Evie have to pay in dividends this year?
Select one:
A. P17,000,000
B. P5,000,000
 C. P11,000,000
D. P23,000,000

__________ is an artificial person created by law.

Select one:
A. Sole proprietorship
B. Partnership
C. Cooperative
D. Corporation

In 2019, Evie Corporation issued 5,000 shares of P10 par value ordinary shares for P100 per
share. In 2020, Evie reacquired 2,000 of its shares at P150 per share from the estate of one of its
deceased officers and immediately canceled/retired these 2,000 shares. In connection with the
retirement of these 2,000 shares, Evie should debit Share Premium of
Select one:
a. P20,000
b. P280,000
c. P180,000
d. P100,000

Question text
Evie Corporation has 200,000 shares of P10 par value ordinary shares outstanding on December
31, 2015. On January 2, 2016, Evie declared a share divided of 10,000 shares when the fair
market value is P18. On the date of record, February 3, 2016, the share price is P15. The shares
are issued on March 1, 2016 when the market value of the shares is P25.
When Evie Corporation records the journal entry for the share dividend, retained earnings will be
debited for the number of new shares multiplied by which of the following amounts?
Select one:
A. market value of the shares on March 1, 2016
B. market value of the shares on January 2, 2016
C. par value of shares
D. market value of the shares on February 3, 2016
 3440000
Answer:

On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares -
P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 25% share dividend when the shares market value was P160
per share. The shares were issued on April 15, 2019 when the shares were selling at P180 per
share. For the four months ended April 30, 2019, Evie sustained a net income of P320,000. The
balance of retained earnings of Evie at March 31, 2019 should be

1780000
Answer:

Evie Corporation has 5,000 shares of 6% cumulative, P100 par value, preference shares
outstanding and 175,000 ordinary shares outstanding. The corporation has paid no dividends
since May 31, 2015. For the year ended May 31, 2017, Evie had reported a profit of P1,450,000
and wishes to pay ordinary shareholders a dividend equivalent t0 25% of profit. The total
amount of dividends to be paid by Evie Corporation at May 31, 2017 is
392500
Answer:

The Southern Company repurchased its own shares of common stock. The relevant information
is given below:
Number of shares repurchased: 5,000 shares
Par value per share of US Company: $10
The price at which shares were repurchased: $20 per share
Based on the above information, the journal entry to record the repurchase of 5,000 shares under
cost method would be:
Select one:
A. Common stock 50,000 Dr; Cash 50,000 Cr.
B. Treasury stock 100,000 Dr; Cash 100,000 Cr.
C. Treasury stock 50,000 Dr; Cash 50,000 Cr.
D. Common stock 100,000 Dr; Cash 100,000 Cr.
Question text
At December 31, 2015 and 2016, Evie Corporation had outstanding 2,000 shares of P1,000 par
value, 6% cumulative preference shares and 10,000 shares of P100 par value ordinary shares. At
December 31, 2015, dividends in arrears on the preference shares were P60,000. Cash dividends
declared in 2016 totalled P220,000. What amount of dividends were payable to ordinary
shareholders?
18
Answer:

Stockholders equity is generally classified into two major categories:

Select one:
A. appropriated capital and retained earnings.
B. Paid in capital and retained earnings.
C. contributed capital and appropriated capital.
D. retained earnings and unappropriated capital.

Question text
Which of the following statements is correct?

Select one:
A. Rights issues usually do not have value and cannot be bought and sold in the market
B. Between the declaration date and the ex-dividend date, the market price of the share
includes the dividend.
C. Rights issues, once issued, seldom if ever lapse.
D. When rights are issued to existing shareholders, no disclosure of this needs to be made in
the financial statements.

The total issue price of the ordinary shares is:

 485000
Answer:

Who is known as the real owner of the corporation?

Select one:
A. A creditor
B. A director
C. A common stockholder
D. A preferred stockholder

The shares of common and preferred stock that have been issued and outstanding are reported in
which section of balance sheet?

Select one:
A. Current assets
B. Fixes assets section
C. Liabilities section
D. Stockholders' equity section

Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following
transactions took place during 2017, the first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.

At the end of the Fern’s first year, total paid-in capital amounts to

310000
Answer:

Stock that has a fixed per share amount printed on each stock certificate is called a

Select one:
A. fixed value stock.
B. stated value stock
C. uniform value stock
D. par value stock
uniform value stock
Which of the following statements is false?

Select one:
A. Liquidating dividends represent a return of income to the shareholders.
B. Liability dividends arise when the board of directors declares a dividend and issues
promissory notes, bonds, scrip or other long-term indebtedness to the shareholders in lieu the
date of record.
C. The ex-dividend date is the day following the date record.
D. A share dividend, but not a cash dividend, usually causes a decrease in retained earnings
and an increase in contributed (permanent) capital of the corporation.

Evie Corporation's Shareholders' Equity accounts at December 31, 2019 were as follows:
Ordinary Shares, P20 par, P8,000,000
Share premium, P2,400,000
Retained earnings, P1,275,000
All ordinary shares outstanding at December 31, 2019 were issued in 2017 for P26 a share. On
January 4, 2020, Evie reacquired 20,000 of its ordinary shares at P24 a share and retired
them. Immediately after the shares were retired, the balance in share premium was
1125000
Answer:

Question text
On May 1, 2016 Evie Company issued P2 Million, 20-year, 10% bonds for P2,120,000. Each
P1,000 bond had a detachable warrant eligible for the purchase of one share of Evie’s P50 par
ordinary share for P60. Immediately after the bonds were issued, Evie’s securities had the
following market values: 10% bonds without warrants – P1,040; Warrants – P20; Ordinary Share
P50 par – P56. What amount should Evie record as part of equity as a result of the foregoing?

Select one:
A. P 80,000
B. P 40,000
C. P120,000
D. P0
Which of the following statements is correct?

Select one:
A. A large share split should be accounted for by capitalizing the current market value of the
share.
B. A share dividend (declared and issued) does not change the total assets, total liabilities, or
total shareholders’ equity of the issuing corporation.
C. A share dividend and a share split are identical in all respects for the corporation issuing
the dividend or splitting the share.
D. When a corporation declares a small share dividend, it should capitalize the par value of
the shares.

A company issued rights to its existing shareholders to purchase, for P50 per share, unissued
share of P15 par value. When the rights lapse,
Select one:
A. Stock rights outstanding will be debited.
B. Additional paid-in capital will be credited.
C. Additional paid-in capital will be debited.
D. No entry will be made.

On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares -
P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160
per share. The shares were issued on April 15, 2019 when the shares were selling at P180 per
share. For the four months ended April 30, 2019, Evie sustained a loss of P320,000. The total
shareholders' equity of Evie at March 31, 2019 should be

Answer:

Southern Company purchased its own par value stock on January 1, 2017 for P20,000 and
debited the treasury stock account for the purchase price. The stock was subsequently sold for
P12,000. The P8,000 difference between the cost and reissue price should be recorded as a
deduction from

Select one:
A. net income.
 B. Share premium to the extent that previous net gains from sales of the same class of stock
are included therein, otherwise; from retained earnings.
C. Share premium without regard as to whether or not there have been previous net
gains from sales of the same class of stock included therein.
D. retained earnings.

Choose the most correct statement regarding a 2-for-1 share split and a 100% share dividend.

Select one:
A. Both cause a significant increases in the ordinary shares account.
B. Neither affect par value.
C. Both cause the same reduction in retained earnings.
D. Both double the number of shares outstanding.
E. Only one effects contributed capital in excess of par on ordinary shares.

When the rights are issued to current shareholders, the number of rights to be issued per existing
share will:

Select one:
A. Depend on the number purchased by existing shareholders.
B. Be the number of rights needed to obtain one additional share multiplied by the number of
shares already held.
C. Vary depending on the number per share already held, as determined and announced by
the corporation
D. Usually be only one right per share already held

Evie Corporation was incorporated on January 1, 2015 with the following authorized
capitalization:
200,000 shares of Ordinary Shares, no par, stated value P100 per share
200,000 shares of 10% cumulative preference shares, P50 par value per share
During 2015, Evie issued 150,000 ordinary shares for a total of P18,000,0000 and 50,000
preference shares at P60 per share. In addition, on December 15, 2015, subscriptions for 20,000
preference shares were taken at a purchase price of P100. These subscribed shares were paid for
on January 2, 2016. Profit for 2015 was P5,000,000. What should Evie report as total
contributed capital on its December 31, 2015 statement of financial position?
Answer: