Question #1

Romeo Corporation presented the following balance sheet for Dec.31,2013:

ASSETS
Current Assets
30,000
Treasury shares (at market, cost is P15,000)
14,000
Fixed Assets
56,000
Total Assets
100,000
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
20,000
Ordinary shares subscribed (500 shares)
10,000
Long term debt
8,000
Total liabilities
38,000
Ordinary shares (4,000 shares Issued)
18,000
10% Preference shares (1,000 shares
12,000
issued)
Subscription receivable
(4,000)
Reserve for depreciation
16,000
Accumulated profit
20,000
Total Shareholders equity
62,000
Total liabilities and shareholders equity
100,000
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 shares
a.
b.
c.
d.

14,000
20,000
15,000
18,750

Question #2
The following data were compiled prior to preparing the balance sheet of the Garry
Corporation as of December 31, 2013:
Authorized common stock, P100 par value
Cash dividends payable
Donated capital
Gain on sale of treasury stock
Net unrealized loss on available for sale
securities
Premium on capital stock
Premium on bonds payable
Reserve for bond sinking fund
Reserve for depreciation
Revaluation increment on property
Retained earnings, unappropriated
Subscribe capital stock
Stock subscriptions receivables
Stock warrants outstanding
Treasury stock, at cost
Unissued common stock

4,000,00
0
160,000
800,000
80,000
96,000
320,000
240,000
400,000
600,000
800,000
720,000
480,000
120,000
200,000
144,000
800,000

Legal capital
a.
b.
c.
d.

3,680,000
3,560,000
3,200,000
4,000,000

Question #3
The following data were compiled prior to preparing the balance sheet of the Garry
Corporation as of December 31, 2013:
Authorized common stock, P100 par value
Cash dividends payable
Donated capital
Gain on sale of treasury stock
Net unrealized loss on available for sale
securities
Premium on capital stock
Premium on bonds payable

4,000,00
0
160,000
800,000
80,000
96,000
320,000
240,000

Reserve for bond sinking fund

Reserve for depreciation
Revaluation increment on property
Retained earnings, unappropriated
Subscribe capital stock
Stock subscriptions receivables
Stock warrants outstanding
Treasury stock, at cost
Unissued common stock
Additional paid-in capital (APIC)
a.
b.
c.
d.

400,000
600,000
800,000
720,000
480,000
120,000
200,000
144,000
800,000

1,400,000
1,200,000
1,320,000
320,000

Question #4
Following is the stockholders equity section of Vivacious Corporations balance
sheet at December 31, 2012:
Common stock, P10 par value; authorized
1,500,000
shares; issued and outstanding 900,000
shares
Additional paid-in capital
Retained earnings
Total stockholders equity

9,000,000

750,000
2,700,000
12,450,00
0
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 for a
secondhand equipment. 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 equity

a.
b.
c.
d.

16,425,000
16,065,000
14,295,000
16,095,000

Question #5
Romeo Corporation presented the following balance sheet for Dec.31,2013:
ASSETS
Current Assets
30,000
Treasury shares (at market, cost is P15,000)
14,000
Fixed Assets
56,000
Total Assets
100,000
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities
20,000
Ordinary shares subscribed (500 shares)
10,000
Long term debt
8,000
Total liabilities
38,000
Ordinary shares (4,000 shares Issued)
18,000
10% Preference shares (1,000 shares
12,000
issued)
Subscription receivable
(4,000)
Reserve for depreciation
16,000
Accumulated profit
20,000
Total Shareholders equity
62,000
Total liabilities and shareholders equity
100,000
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 capital

a.
b.
c.
d.

50,250
41,250
98,000
40,250

Answers:
1.
2.
3.
4.
5.

C. 15,000
A. 3,680,000
A. 1,400,000
D. 16,095,000
A. 50,250