Skip to content

AUDITING PROBLEMS: ROQUEThe shareholders’ equity Hanabi Comp

Do you have a similar question? Our professional writers have done a similar paper in past. Give Us your instructions and wait for a professional assignment!        

AUDITING PROBLEMS: ROQUEThe shareholders’ equity Hanabi Company on January 1, 2019 showed the following:Ordinary shares, P50 par, auth. 100,000 shares, 50,000 shares issued P2,500,000Preference shares, P100 par, authorized 50,000 shares, 20,000 shares?issued. Each preference share is convertible to 3 ordinary shares. 2,000,000Share premium – Ordinary 600,000Share premium – Preference 1,200,000Retained earnings 2,750,000The following transactions occurred during the year:a. Reacquired 15,000 ordinary shares on February 1 at P90 per share and placed them in the?reasury.b. Reissued 8,000 treasury shares at P122 per share on June 4.c. Reissued 5,000 treasury shares at P75 per share on August 3.d. Issued stock rights on ordinary shares on September 30. Five stock right entitles the?tockholder to purchase an additional share for P80 per share. The rights shall expire on?ecember 31.e. On October 1, 5,000 of the preference shares were converted to ordinary shares.f. All but 3,000 share rights were exercised when the market value of the shares was at P80 per?hare on October 11The shareholders’ equity Hanabi Company on January 1, 2019 showed the following:Ordinary shares, P50 par, auth. 100,000 shares, 50,000 shares issued P2,500,000Preference shares, P100 par, authorized 50,000 shares, 20,000 shares?issued. Each preference share is convertible to 3 ordinary shares. 2,000,000Share premium – Ordinary 600,000Share premium – Preference 1,200,000Retained earnings 2,750,000The following transactions occurred during the year:a. Reacquired 15,000 ordinary shares on February 1 at P90 per share and placed them in the?reasury.b. Reissued 8,000 treasury shares at P122 per share on June 4.c. Reissued 5,000 treasury shares at P75 per share on August 3.d. Issued stock rights on ordinary shares on September 30. Five stock right entitles the?tockholder to purchase an additional share for P80 per share. The rights shall expire on?ecember 31.e. On October 1, 5,000 of the preference shares were converted to ordinary shares.f. All but 3,000 share rights were exercised when the market value of the shares was at P80 per?hare on October 11g. Declared P3 per share cash dividends on ordinary shares and P6 per share on preference?hares on December 15, to stockholders as of December 31 payable on January 15, 2020.h. Reported an adjusted net income of P540,000.Requirements:40. The entry to record the reissuance of treasury shares in item c shall involve a:a. Credit to share premium at P75,000.b. Credit to treasury shares at P375,000.c. Debit to retained earnings at P75,000.d. Debit to share premium at P75,000.41. The entry to record the conversion of preference share to ordinary shares in item e shall involve a:a. Debit to share premium at P50,000b. Credit to share premium at P50,000c. Debit to retained earnings at P300,000d. Credit to retained earnings at P300,00042. The entry to record the exercise of stock rights in item f shall involve a:a. Credit to ordinary shares at P475,000b. Credit to share premium at P250,000c. Credit to ordinary shares at P460,000d. Credit to share premium at P270,00043. The cash dividend declaration in item g shall involve a debit to retained at:44. What is the total additional paid in capital as of December 31, 2019?AccountingBusinessManagerial AccountingBUSINESS A 66

Get a plagiarism-free order today   we guarantee confidentiality and a professional paper and we will meet the deadline.    

Leave a Reply

Order a plagiarism free paper today. Get 20% off your first order!

X