Required: True or False

33. The highest bidder in a delinquency sale. is the person willing to pay the \"offer price" that Includes the full amount of the subscription balance plus accrued interest, cost : of advertisement and expenses of auction sale in exchange for the smallest number of shares. 34. Treasury stocks refer to shares reacquired by the issuing corporation. 35, The purchase of treasury stocks reduces both total assets and total shareholders? , equity. - ' ' 36. The entry to record the purchase of treasury stock will cause total shareholders' 3- equity to decrease by the amount of the cost ofgthe treasury shares. . 37. When 10,000 shares of P20 par value ordinary shares are issued in payment for a . parcel of land with a fair market Value of P300,000, the Ordinary'Sharesaccount is credited for P200,000, and the Share Premium-Ordinaryaccount is credited for P100,000. ' ' ' 38. If share capital is issued for an outstanding liability, the fair market value of the I ' share capital issued should be the measure for recording. ., 39. The balance in the Share Pre'mium account must be added to the balance of the ' Ordinary Shares account to compute the amount of legal capital for a corporation ' with a par value ordinary share. _ y I, 40_ Treasury stocks shall have no voting right as long as they'remain in the treasury. \\ 41. Organization cost is an asset and is usually amortized oVer five years. 42. The reissuance of treasury stocks for less than their par or issued value is prohibited ' by law. ' ' - ' 43. Contributed capital has two, major componentslegaI ca In case of par value shares, legal capital is the aggregate subscribed shares. g ' p'ital and share premium. _ Par value of all issued and . l 44, If share capital is issued for a non-cash consideration, the amount equal to the following in the order of priori capital issued, fair market value of the non ' stated value of the share capital issued. Proceeds is recorded at an _ h W1 fair market value of share ' cas consideration received and par 0r ' 45, Treasury stock may be either ordinary or preference Share 46. The sale of treasury stock at an amount greater t han . '. ., reported on the statement of recognized income and \"52:: resuhs '\" 3 gain to be '- . e. ~ 6-23 I WIN Ballada's Partnership and Corporation Accounting at W?! is?\" ' 1:, ' The Par value of [1531 capital is that poitio ' ' in the ,5 ed earnings is a fUnd of cash accumulated from profitable ope t _ > ra ions of the e a stated value, the stated value of the share gal capital of the corporation. 5 issued n ' ' .for its no-par value shares shall entire consider ' ' tribution as dividends. as capital and shall not ' an acknowledgment bit d franchise. erest be treated the gcorpOration of an int i" holder in the cor ' ould be credited to with par value are sold, the proceeds sh the ordinary shares account in full. _ V l ' 'hareholder's investment in the The entry to record the retir Shares accoUnt for Management engages the corporatio The limited Iia disadvantage. ' ' . n market. W . ~ . he" Ordinary shares without par value are to . . \"'9 rdlnarv shares account. Paid.\" . '" capital, which must remain CD "Porate creditors. ' In; - WW Stock ls reported as an asset on the t"(as : . ul'l/ shares may be sold later. chapter 6: 5h True or False . ( . 1. When nopar ordinary shares without a stated value is issued for cash, the Ordinary Shares accOunt is credited for an amount equal to the Cash proceeds. 2. The sale of shares in a corporation by one shareholder to another affects the total capital of the corporation. ' ' ' 3. When ordinary shares are sold for a pricehigher than par valuefthe ordinary shares account is credited only for the par value- of the shares sold. ' 4. In reference to the previous question, any amount received in excess of the 'par ' ' value of the ordinary shares sold is recorded as a credit to the retained earnings . account. 5. When ordinary shares with a par value are sold for a price that exceeds par value, the Ordinary Shares account is credited only for the par value of the shares sold. 6. Ordinary shares may be issued at a price lower than its par value. 7. when tre'asurv stock is sold at a price below its cost, the entry to record the sale has the'e'ffectrof reducing total shareholders' equity. 8 Treasury stock usually-is recorded at par Value when purchased. ' hares with par value are sold the r ' 9, When ordinal'V 5 . . , , ' P OCBEds should be ' ' ' the ordinary shares account to the extent of'the Par valuedf the Shares Credited to ' 10 Preference share is considered the r'eSidualequity 0an corporatin 11 The number of authOriged shares should always equal or gge outstanding shares; d the number of 12 Treasury stocks are part of the outstanding share capital of a Corp; ' '. - , . . _ oration. ets received, from shareholders [as donations 13. A55 . _ . y . ket value of the items received, With the credit - corded at the fair i - l i i l l l l l l i i l l l _ 53. The Corporation C ww~sr_e . . ue is the ' 47. F I , val b esnmatEd am""t that a willing seller w ncrally capable war for the sale or exchange of the asset in arid receive from a , , a ree market. e of the corporate form-is the abili ' . tY Of the . to attend to the corporation's affairs. board t \""9 professional urdatron, shareholders Whose stock is preferred as to vent of 'corporate liq the par value of their shares before any amounts are In the e a 5 . titled to receive ' ditors or ordinary shareholders_ t of legal capital exists to' protect the corporation's assets for the 50, The concep fthe corporation. shareholders o deducted from total share'capital and retained earnings ury stock is 51. The cost of treas tal shareholders' equity. in determining to e total consideration received by the 52. In case of no-pa , , ' ' hares to the shareholders but this would r. the stated value. ' ode prohibits the Original issue of share capital for a consideration less than the par or stated value. he book value of the Share bf stock. he \"offer price" d interest, cost umber e is thevperson willing topay t us accrue 55' 'The highest bidder in a delinquency"sal for the highest n Eat includes the full amount of the subscription balance pl advertisement and expenses of auction sale in exchange of shares_ ' ' - _ e business. 55 Th ' ' e - . - board of directors carries out the day-to-day operations of th The Par value of share constitutes the . Issuance of treasury stocks "at a price ab reported ' In the statement of recognized income and expense. Shareh I Olde . corporation? elect the board of directors wh