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Exercise - Part 2

During its first year of operations, Lebanon Company issued various shares and recorded the following transactions: - Issued 2,400,000 ordinary shares at P10 par value and 300,000 preference shares at P50 par value - Sold 500,000 ordinary shares for P100 each, raising P50 million - Issued 20,000 ordinary shares to attorneys worth P185,000 - Sold 35,000 ordinary shares and 10,000 preference shares for P6 million - Issued 1,900 ordinary shares for equipment worth P185,000

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531 views

Exercise - Part 2

During its first year of operations, Lebanon Company issued various shares and recorded the following transactions: - Issued 2,400,000 ordinary shares at P10 par value and 300,000 preference shares at P50 par value - Sold 500,000 ordinary shares for P100 each, raising P50 million - Issued 20,000 ordinary shares to attorneys worth P185,000 - Sold 35,000 ordinary shares and 10,000 preference shares for P6 million - Issued 1,900 ordinary shares for equipment worth P185,000

Uploaded by

lois martin
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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During its first year of operations, Lebanon Company entered into the following trancations relating to shareholder

of incorporation authorized the issue of 2,400,000 ordinary shares, P10 par per share, and 300,000 preference shar

May 14 Sold 500,000 ordinary shares for P100 per share


May 15 Issued 20,000 ordinary shares to attorneys in exchange for legal services
Sold 35,000 of its ordinary shares and 10,000 preference shares for P6,000,000

Aug 20 Issued 1,900 of its ordinary shares in exchange for equipment for which the cash price was know

Based on the preceding information, determine the correct balance of each of the following accounts.

1. Ordinary share capital


2. Share premium - ordinary shares
3. Preference share capital
4. Share premium - preference shares
ancations relating to shareholder's equity, Lebanon's articles
are, and 300,000 preference shares, P50 par per share.

s for P6,000,000

or which the cash price was known to be P185,000

following accounts.
You have been assigned to the audit of Malaysia Co., a manufacturing company. You have been asked to summariz
shareholder's equity and other related accounts. The shareholder's equity secition of Malaysia's December 31, 202

Ordinary share capital, P2 par value, 1,000,000 shares authorized, 180,000 shares issued,
177,580 shares outstanding
Share premium - issuance
Share premium - treasury shares
Retained earnings
Cost of 2,420 treasury sahres
Total shareholder's equity

You have extracted the following information from the accounting records and audit working papers.

Jan. 15 Malaysia reissued 1,300 treasury shares for P40 per share. The 2,420 treasury shares on hand at
in one block in 2020.

Feb. 1 Sold 180, P1,000, 9% bonds due February 1, 2024, at 103 with one detachable share warrant att
February 1. The fair market value of the bonds without the share warrants is 95. The detachabl
the holder to purchase 10 ordinary shares at P40 per share.

Mar. 6 2,800 ordinary shares were subscribed for at P44 per share. 40% of the subscription was collect

Mar. 20 The balance due on 2,400 shares was received and those shares were issued.

Nov. 1 There were 110 share warrant detached from the bonds and exercised.

Malaysia's net income for 2021 is 950,000


ou have been asked to summarize the transactions for the year ended December 31, 2021, affecting
of Malaysia's December 31, 2021, statement of financial position follows:

360,000
3,640,000
45,000
649,378
(145,200)
4,549,178

dit working papers.

2,420 treasury shares on hand at December 31, 2021, were purchased

one detachable share warrant attached to each bond. Interest is payable annually on
are warrants is 95. The detachable warrants have a fair value of P50 each and expire on February 1, 2015. Each warrant entitles

0% of the subscription was collected.

es were issued.
h warrant entitles

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