CORPORATION

A. On April 1, 2019, KMJS Corporation, a newly formed company, had the following shares issued and outstanding.

Ordinary share, P20 par (20,000 shares originally issued for P60 per share)
Preference share, P50 par (6,000 shares originally issued for P100 per share)

1. On April 1, 2019, KMJS Company should report Ordinary Share Capital / Preference Share Capital / and Share
Premium, respectively of

a. P400,000/P300,000/P1,100,000
b. P1,200,000/P300,000/P300,000
c. P400,000/P600,000/P800,000
d. P1,200,000/P600,000/P0

B. Dalagang Pilipina Company provided the following information on December 31,2019:

Share Premium P9,000,000 Preference Share (at P20 par) P1,750,000

Accounts Payable P1,100,000 Ordinary Share (at P10 par) P400,000
Sales P10,000,000 Total Costs and expenses P7,800,000
Treasury Share (Ordinary) P250,000 Retained Earnings, Jan.1 P1,000,000

The credit balance in income summary account has not yet been closed to retained earnings.

2. How much is the total shareholder’s equity at December 31, 2019?

a. P14,100,000 c. P11,900,000
b. P13,400,000 d. P11,200,000

C. The capital structure of Junel Company at December 31,2019 follows:

12% Preference share capital, P200 par, 15,000 shares issued and outstanding P3,000,000
Ordinary share capital, P30 par, 250,000 shares issued and outstanding 7,500,000
Share Premium-preference 900,000
Share Premium-ordinary 750,000
Retained Earnings 2,100,000

The following selected transactions relating to shareholder’s equity were noted in 2019:

A. Purchased and retired 2,000 preference shares at P280 each.

B. Purchased 30,000 of its own ordinary shares at P35 per share.
C. Reissued 5,000 treasury shares at P38 each.
D. Shareholders donated to the company 20,000 ordinary shares when the market price is P36 per share.
E. One half off the donated shares were issued for P39 each.
F. Profit for 2019 was P1,850,000.
G. The board of directors declared and paid the regular annual dividend on the preference share and P1.50 per
ordinary share dividend.

3. How many preference shares are outstanding at December 31,2019?

a. P18,000 c. P15,000
b. P17,000 d. P13,000

4. How many ordinary shares are issued and outstanding, respectively at December 31,2019?

a. 250,000 and 215,000 c. 250,000 and 285,000

b. 215,000 and 250,000 d. 285,000 and 250,000

5. What is the total amount of dividends on preference and ordinary shares?

a. P687,000 c. P322,500
b. P634,500 d. P312,000
6. How much is the total shareholder’s equity at December 31, 2019?

a. P14,250,000 c. P14,453,500
b. P14,435,500 d. P14,500,000

D. The shareholder’s equity of Michael Company revealed the following on June 30, 2019:

Preference Share, P100 par value P230,000

Share Premium-Preference 80,500
Ordinary Share, P15 par value 525,000
Share Premium-Ordinary 275,000
Subscribed Ordinary Share 5,000
Retained Earnings 190,000
Notes Payable 400,000
Subscription Receivable-Ordinary 40,000

7. How much is the legal capital of the company?

a. P1,305,000 c. P760,000
b. P1,115,000 d. P755,000

E. Of the 125,000 ordinary shares issued by Peppa Company, 25,000 were held as treasury shares on December 31,2018.
During 2019, transactions involving Peppa’s ordinary shares were as follows:

January 1 through October 31- 13,000 treasury shares were distributed to officers as part of share compensation plan.

November 1- A 3-for-1 share split took effect.

December 1- Peppa purchased 5,000 of its own shares to discourage an unfriendly takeover. These shares were not
retired.

8. At December 31, 2019, how many shares of Peppa’ Company’s ordinary share capital were issued?
a. 125,000 shares c. 334,000 shares
b. 324,000 shares d. 375,000 shares

9. Use the same information given in No. 9. How many shares of Peppa Company ordinary share capital were
outstanding?

a. 334,000 shares c. 125,000 shares

b. 324,000 shares d. 108,000 shares

F. Mary Co. Had outstanding 20,000 shares of P100 par value 8% cumulative preference share capital and 30,000 shares
of P50 par value ordinary share capital on December 31,2019. At December 31,2019, dividends in arrears on the
preference shares were P80,000. Cash dividends declared in 2019 totaled P300,000.

10. The amounts paid to preference shareholders and ordinary shareholders are

a. P80,000 and P220,000 c. P220,000 and P80,000

b. P160,000 and P140,000 d. P240,000 and P60,000

G. At December 31, 2018 and 2019, Shania Company had outstanding 4,000 shares of P100 par value 12% cumulative,
fully participating preference share and 20,000 of P10 par value ordinary share. At December 31,2018, dividends in
arrears on the preference shares were P24,000. Cash dividends declared in 2019 totaled P108,000.

11. What are the amounts of dividend per share on the preference and ordinary shares, respectively?

a. P20.00 and P1.40 c. P18.00 and P1.40

b. P20.00 and P1.80 d. P18.00 and P1.80

H. On December 31,2019, Renzo Company was registered at the Securities and Exchange Commission with 100,000
authorized ordinary share of P100 par value. On the same date, 40,000 shares were sold and issued at P105 per share. On
May 14, 2019, the corporation purchased 600 shares of its ordinary shares capital at P110 per share. On September
15,2019, 400 treasury shares were sold at P95. During 2015, the corporation realized a profit after tax of P830,000 and
paid a cash dividend of P200,000.

12. What is the total shareholder’s equity of Renzo on December 31,2019?

a. P10,602,000 c. P4,802,000
b. P4,820,000 d. P4,352,000

I. Cage company had 80,000 ordinary shares outstanding in January 2016. The company distributed a 15% share bonus in
March. After acquiring 10,000 shares in november, the company split its shares 1-for-4 in December.
13. How many ordinary shares are outstanding as of December 31, 2016.
a. 328,000 c. 20,500
b. 23,000 d. 13,000

J. Dayton Company had 8,000 ordinary shares outstanding in January 2016. The company distributed a 15% bonus issue
in March and another 10% bonus issue in June. On July 31, 2016, the company reacquired 2,000 treasury shares. On
October 15, it split on a 3-for-1 basis.
14. How many ordinary shares are outstanding as of December 31, 2016?
a. 30,360 c. 10,120
b. 24,360 d. 8,120

K. At the beginning of 2016, Better Company had:

Unappropriated/Unrestricted Retained Earnings – P1,800,000
Appropriated/Restricted Retained Earnings – P1,200,000
Throughout the year, the company had 20,000 shares of P100 par value ordinary shares that are issued and
outstanding.
During the year 2016, better company reported profit of P5,000,000. Purchase treasury shares for P580,000, declared
cash dividends of P1,500,000, reissued alll treasury shares at a gain of P180,000. Declared and issued
5,000 ordinary shares as bonus issue when the market value was P150 per share.

15. What is the Retained Earnings balance at December 31, 2016.

a. P6,180,000 c. P5,930,000
b. P6,000 000 d. P5,750,000

L.. At December 31, 2015, Travolta Company hand 20,000 shares of P20 par value treasury shares that were acquired in
2015 at P24 per share. In May 2016, Travolta issued 15,000 of these treasury shares at P20 each. The cost method is used
the treasury share transactions.
16. At December 31, 2016, what amount should Travolta show in notes to financial statements as a restriction of Retained
earnings?
a. P10,000 c. P120,000
b. P100,000 d. P180,000
M. The Power Company had 100,000 of 15 par value ordinary shares on January 1, 2016. During 2016, the following
transactions pertaining to its ordinary shares occurred:

 Purchased 5,000 shares as treasury at P30 each

 The ordinary share was split 3-for-1
 Reissued 3,000 treasury shares at P14 each
17. . What is the total cost of the remaining treasury shares at the end of 2016?
a. P120,000 c. P60,000
b. P108,000 d. P0

O. On July 1, 2015, Crafters, Inc. has 200,000 ordinary shares outstanding with par value of P10 per share and market
value of P12 per share. On the same date, Crafters declared a 1-for 2 reverse share split. The par value of the share was
increased from P10 to P20 and one new P20 par value share was issued for every two P10 par outstanding. Immediately
before the 1-for-2 reverse share split, Crafters’ share premium account balance was P450,000.
18. What should be the balance in Crafter’s share premium account immediately after the reverse share split is effected?
a. P900,000 c. P650,000
b. P225,000 d. P450,000