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The document provides various financial scenarios involving different companies, detailing their share capital, share premium, retained earnings, and other financial metrics. It includes questions regarding the calculation of shareholders' equity, legal capital, share premium, and lease liabilities among others. Each scenario presents multiple-choice answers for the calculations required.

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11 views7 pages

computation focus

The document provides various financial scenarios involving different companies, detailing their share capital, share premium, retained earnings, and other financial metrics. It includes questions regarding the calculation of shareholders' equity, legal capital, share premium, and lease liabilities among others. Each scenario presents multiple-choice answers for the calculations required.

Uploaded by

sirenelatch
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Mara Company provided the following data at year-end:

Authorized share capital. 5,000,000

Unissued share capital. 2,000,000

Subscribed share capital. 1,000,000

Subscription receivable. 400,000

Share premium. 500,000

Retained earning unappropriated 600,000

Retained earnings appropriated. 300,000

Revaluation surplus. 200,000

Treasury shares, at cost. 100,000

What total amount should be reported as shareholders' equity?

a. 5,100,000

c. 4,900,000

b. 5,500,000

d. 4,800,000

Glenn Company provided the following information at year-end:

Preference share capital, P100 par. 3,000,000

Share premium preference share. 500,000

Ordinary share capital, P10 par. 6,000,000

Share premium ordinary share. 2,000,000

Subscribed ordinary share capital. 4,000,000

Retained earnings. 2,500,000

Subscription receivable- ordinary share. 1,000,000

What amount should be reported as legal capital?

a. 15,500,000

b. 13,000,000
c. 15,000,000

d. 12,000,000

At the beginning of the current year, Ria Company issued 10,000 ordinary
shares of P20 par value and 20,000 convertible preference shares of P20 par
value for a total of P800,000.

At this date, the ordinary share was selling for P36 and the convertible
preference share was selling for P27.

1. What amount of the proceeds should be allocated to the preference


shares?

a. 600,000

b. 540,000

c. 480,000

d. 440,000

2. What amount of the proceeds should be allocated to the ordinary shares?

a. 360,000

B. 200,000

c. 320,000

d. 400,000

3. What amount should be recorded as share premium from the issuance of


preference shares?

a. 180,000

b.100,000

c.80,000

d. 0

4. What amount should be recorded as share premium from the issuance of


ordinary shares?.
a. 200,000

b. 160,000

c. 120,000

d. 0

At the beginning of current year, Ashe Company was organized with


authorized capital of 100,000 shares of P200 par value.

January 10. Issued 25,000 shares at P220 a share

March 25. Issued 1,000 shares for legal services when the fair value was
P240 a share

September 30 Issued 5,000 shares for a tract of land when the fair value was
P260 a share

1. What amount should be reported as share capital?


a. 7,640,000
b. 6,200,000
c. 7,440,000
d. 5,000,00
2. What amount should be reported for share premium?

a. 840,000

b. 800,000

c. 540,000

d. 500,000

At the beginning of current year, Hanina Company reported the following


shareholders’ equity:

Share capital, P10 par, outstanding 225,000 shares. 2,250,000

Share premium. 1,500,000

Retained earnings. 2,000,000

During the current year, the entity had the following transactions:
Acquired 10,000 treasury shares for P50 per share or P500,000.

Sold 5,000 treasury shares at P60 a share.

Sold 2.000 treasury shares at P45 per share

Net income for the year was P2,500,000.

1. What amount should be reported as total amount of share premium at


year-end?
a. 1,500,000
b. 1,560,000
c. 1,540,000
d. 2,550,000
2. What amount should be reported as share capital at year-end?
a. 2,250,000
b. 2,150,000
c. 2,320,000
d. 2,300,000
3. What amount should be reported as total shareholders’ equity at year-
end?

A.8,140,000

b. 8,300,000

c. 8,250,000

d. 8,290,000

At year-end, Pack Company canceled 5,000 shares of P50 par value held in
treasury at an average cost of P120 per share.

Before recording the cancelation of the treasury shares, the entity had the
following balances:

Share capital issued originally at P75 per share. 2,500,000

Share premium. 1,250,000

Retained earnings. 1,000,000

Treasury shares, at cost. 600,000


1. What amount should be reported as adjusted share capital at year-
end?

A 2,250,000

b. 2,500.000

c. 1,900,000

d. 2,125,000

2. What amount should be reported as adjusted share premium at year-


end?
a. 1,250,000
b. 1,125,000
c. 900,000
d. 800,000
3. What amount should be reported as adjusted retained earnings at
year-end?
a. 1,000,000
b. 775,000
c. 650,000
d. 1,200,000

During the current year, Hyatt Company issued for P 110 per share, 15,000
convertible preference shares of P 100 par value.

One preference share may be converted into three ordinary shares with P 25
par value at the option of the preference shareholders.

All of the preference shares were converted into ordinary shares at year-end.

The market value of the ordinary shares at the conversion date was P 40.

1) What amount should be credited to ordinary share capital as a result of


the conversion at year-end?
A. 1,125,000
B. 1,500,000
C. 1,650,000
D. 1,800,000
2) What amount should be credited to ordinary share premium as a result
of the conversion at year-end?
A. 375,000
B. 525,000
C. 150,000
D. 0
On December 31, 2019, Action Company signed a 7-year finance lease
tor an airplane. The airplane's fair value was P8,415,000.

The entity made the first annual lease payment of P1,530,000 on


December 31, 2019,

The entity's incremental borrowing rate was 12%, and the interest rate
implicit in the lease, which was known by Action, was 9%. The rounded
present value factors for an annuity due are:
9% for 7 years. 5.5
12% for 7 years. 5.1
* What amount should be reported as lease liability on December 31,
2019
a. 8,415,000

b. 7,803,000

c. 6,885,000

d. 6,273,000

What amount should be reported as interest expense for 2020?

a. 619,650
b. 826,200
c. 757,350
d. 841.500

Rapp Co. leased a new machine to Lake Co. on January 1, year 1. The
lease is an operating lease and expires on January 1, year 6. The annual
rental is 90,000. Additionally, on January 1. Year 1, Lake paid 50,000 to
Rapp as a lease bonus and 25,000 as a security deposit to be refunded
upon expiration of the lease. In Rapp’s year 1 income statement, the
amount of rental revenue should be

A. 140,000

b. 125.000

c. 100,000

d. 90,000
RC Company reported pretax financial income of P6,200,000 for the
current year. Included in other income was P200,000 of tax-exempt
interest revenue from government bonds held by the entity. The income
statement included depreciation expense of P500,000 for a machine with
cost of P3,000,000. The income tax return reported P600,000 as
depreciation on the machine. The enacted tax rate is 30% for the current
year and future years. What amount should be reported as current tax
expense for the current year?

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