Reference: Auditing problems, Cabrera

You were assigned to audit the shareholders' equity of Poveous Corp. for the year ended December

31, 2020. Poveous Corp. was incorporated in early 2019 when it was authorized by SEC to issue

500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The

following schedule reflects the company's capital balances as of December 31, 2019:

Ordinary shares, 100,000 shares issued during the company's

incorporation in exchange of a land with a fair value of P1.4M.

P1,800,000

Preference shares, 50,000 shares issued during the company's

incorporation at P50 per share. Each preference share is convertible to

four ordinary shares.

2,500,000

Retained earnings, which is the company's net income in 2019 540,000

Total shareholders' equity P4,840,000

Your inquiries and investigation revealed the following transactions, which occurred in 2020:

a. On February 12, 20,000 preference shares were converted to ordinary shares.

b. On August 15, the company reacquired 20,000 ordinary shares (from the 2019 issue) at P22

per share and reverted them to treasury since it intends to reissue the same.

c. On October 11, the company reissued 4,000 treasury shares at P28 per share.

d. On November 5, the company reissued 6,000 treasury shares at P19 per share.

e. On December 1, the company retired 5,000 treasury shares and reverted them to unissued

basis.

f. On December 15, the company reissued 2,000 treasury shares in lieu of an equipment with a

fair market value of P62,000.

g. The company registered an adjusted net income in 2020 at P830,000.

Based on the information above, determine the adjusted balance of the following as of Dec. 31, 2020:

11. Ordinary Shares

12. Preference Shares

13. Share premium - Ordinary shares

14. Share premium - Preference shares

15. Share premium - Treasury shares

16. Retained earnings - Unappropriated

17. Total stockholders' equity