Instructions:

• Do not use peso sign
• Do not use comma
• Do not use decimal point
• Round off your final answer to the nearest whole number ( Unless there is a specific instruction attached to the problem or question)
• Example: If your answer is Php 123,456.78, write 123457

Questions (13-25)

13.

CFAS Company provided the following information at year-end:

Preference share capital, P100 stated value	P2,000,000
Share premium - preference share	350,000
Ordinary share capital, P10 stated value	5,000,000
Share premium - ordinary share	1,250,000
Subscribed ordinary share capital	3,300,000
Retained earnings	2,500,000
Subscription receivable - ordinary share	1,000,000
Treasury shares - ordinary	500,000

What is the amount of legal capital? ________

14.

CFAS Company provided the following information at year-end:

Preference share capital, P100 par	P2,000,000
Share premium - preference share	350,000
Ordinary share capital, P10 par	5,000,000
Share premium - ordinary share	1,250,000
Subscribed ordinary share capital	3,300,000
Retained earnings	2,500,000
Subscription receivable - ordinary share	1,000,000
Treasury shares - ordinary	500,000

What is the amount of legal capital? ________

15.

CFAS Company was incorporated on January 4, 2022. The Philippine SEC authorized the company to issue 300,000 ordinary shares, no-par, with P100 stated value and 100,000 5%-preference shares with P50 par value. During the year the entity issued 120,000 ordinary shares for a total consideration of P15,000,000 and 35,000 preference shares at P75 per share. At the latter part of the year, 15,000 preference shares were subscribed for a purchase price P80 per share which were paid for on January of the following year. Profit for the year was P3,250,000.

What amount should be reported as total contributed capital on December 31, 2022?________

16.

CFAS Company was organized in 2022 with authorized capitalization of 500,000 ordinary shares with P150 par value per share and 100,000 preference shares with P100 par value per share. The following transactions during the year.

• January 4, 2022, the company issued 100,000 ordinary shares and 50,000 preference shares for a total consideration of P22,000,000. At that time, the fair value of ordinary shares were P200 per share while the preference shares were P150 per share.
• On June 25, 2022, the entity issued 2,000 ordinary shares in exchange for legal services. The lawyer usually bills P400,000 for this service. On the same date, the ordinary shares were selling for P220 per share.
• On December 30, 2022, the entity issued 10,000 preference shares in exchange for a tract of land. The land has no reasonable fair value. The preference shares were selling for P180 per share on this date.

Answer the following questions (Input your answers as figures, do NOT put any comma, peso sign or extra spaces. E.g. if your answer is one thousand, please input 1000):

1. What amount should be reported as ordinary share capital at the end of the year? ________
2. What amount should be reported as preference share capital at the end of the year? ________
3. What amount should be reported as share premium at the end of the year? ________

17.

CFAS Corporation provided the following information from their financial statements:

	Dec. 31, 2021	Dec. 31, 2022
Ordinary share capital, P20 par	P14,000,000	P16,500,000
Share premium	5,650,000	8,320,000
Retained earnings	3,250,000	6,190,000
Treasury shares (at cost)	2,300,000	3,675,000

Treasury shares were 100,000 shares on December 31, 2021 and 150,000 shares on December 31, 2022. (Input your answers as figures, do NOT put any comma, peso sign or extra spaces. E.g. if your answer is one thousand, please input 1000):

1. What is the number of outstanding shares on December 31, 2021? ________
2. What is the number of outstanding shares on December 31, 2022? ________
3. How many shares were issued during 2022? ________
4. What was the average price of additional shares issued in 2022? (Round answer off to two decimal places) ________

18.

CFAS Corp. has 100,000 shares, P15 par, issued and outstanding at the beginning of the year. Subsequently, the company reacquired 10,000 shares for a total cost of P165,000 from its shareholders. At year-end, the company reissued 5,000 shares for P20 per share.

The entry to reissue the 5,000 treasury shares at year-end will include

Group of answer choices

A credit to share capital of P75,000.

A debit to share premium of P17,500.

A credit to retained earnings of P17,500.

A credit to share premium of P17,500.

19.

On January 2, 2022, CFAS Company issued 100,000 ordinary shares with P50 par value for a total consideration of P8,320,000. Subsequently, the company reacquired 10,000 shares for P95 per share and immediately cancelled them permanently.

The correct entry to record the retirement is?

Journal entry A

Share capital	500,000
Share premium	332,000
Retained earnings	118,000
Cash		950,000

Journal entry B

Cash	950,000
Share capital		500,000
Share premium		332,000
Retained earnings		118,000

Journal entry C

Share capital	500,000
Retained earnings	450,000
Cash		950,000

Journal entry D

Cash	950,000
Share capital		500,000
Share premium		450,000

Group of answer choices

Journal entry D

Journal entry A

Journal entry B

Journal entry C

20.

CFAS Company showed the following information from its shareholders' equity at year-end before the effect of the transaction below:

Ordinary share capital	P6,250,000
Share premium	3,125,000
Retained earnings	3,724,000
Treasury shares (at cost)	1,530,000

The ordinary shares were originally issued for P187.50 per share. At the end of the year, CFAS Company retired 5,100 shares held in treasury. The treasury shares had a P125 par value per share and an average cost per share of P300. (Input your answers as figures, do NOT put any comma, peso sign or extra spaces. E.g. if your answer is one thousand, please input 1000):

1. How much is the adjusted ordinary share capital at year end? ________
2. How much is the adjusted share premium at year end? ________
3. How much is the adjusted balance of retained earnings at year end? ________

22.

The shareholders of CFAS Company approved a three-for-one share split and an increase in authorized shares from 300,000 shares with P15 par value to 900,000 shares with P5 par value.

The shareholders' equity accounts immediately before the split shares were share capital P2,250,000, share premium P1,150,000 and retained earnings P2,640,000.

1. What is the balance of the share premium after the share split is effected? ________
2. What is the balance of the retained earnings after the share split is effected? ________

23.

The CFAS Corporation is authorized to issue 100,000 ordinary shares, P15 par value. At the beginning of the year, 20,000 ordinary shares were issued and outstanding. These shares had been issued at P25. During the year, the company entered into the following transactions:

Jan. 16 - Issued 1,300 ordinary shares at P26 per share.

Mar. 21 - Exchanged 12,000 ordinary shares for a building. The ordinary shares were selling at P29 per share.

May 7 - Reacquired 500 ordinary shares at P24 per share to be held in treasury.

July 1 - Accepted subscriptions to 1,000 ordinary shares at P28 per share. The contract called for 60% down payment with the balance due on June 30 next year.

Sept. 20 - Sold 500 treasury shares at P30 per share.

Total contributed capital at December 31 is ________

24.

The following balances are shown in the shareholders' equity of CFAS Company on December 31, 2022:

Share capital - Preference, P10 par, 100,000 shares	P1,000,000
Share capital - Ordinary, P10 par, 500,000 shares,	5,000,000
Share premium - preference	50,000
Share premium - ordinary	200,000
Retained earnings	100,000
Total	P6,350,000

During 2022, the following transactions pertaining to the shareholders' equity were completed:

• Retirement of 5,000 preference shares at P13 per share.
• Purchase of 5,000 ordinary shares at P12 per share to be held as treasury shares.
• Share split, ordinary, 2 for 1.
• Reissue of 2,000 treasury shares at P8.50 per share.
• Profit for 2022, P315,000.

Compute for the following at December 31, 2022. (Input your answers as figures, do NOT put any comma, peso sign or extra spaces. E.g. if your answer is one thousand, please input 1000):

1. Total share premium ________
2. Total retained earnings ________
3. Total shareholders' equity ________

25.

CFAS Company issued 85,000 ordinary shares. Of these, 4,250 shares were held as treasury on January 1, 2022.

During the current year, the entity reported the following transactions:

Feb. 1	850 shares of treasury were sold.
May. 1	8,500 unissued shares were sold.
Dec. 15	A2-for-1 share split took effect.

1. On December 31, 2018, how many shares were issued? ________
2. On December 31, 2018, how many shares were outstanding? ________

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