Whitestone Co. had the following selected information in its December 31, 2020 Stockholders' Equity portion of...

 

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Whitestone Co. had the following selected information in its December 31, 2020 Stockholders' Equity portion of its balance sheet: 10% Preference shares, P100 par value, 50,000 shares authorized, 10,000 shares issued and outstanding Ordinary shares, P50 par value, 100,000 shares authorized, 50,000 shares issued, 5,000 shares reacquired at P75 per share Share premium on preference shares Share premium on ordinary shares Ordinary share warrants outstanding Accumulated profits 1,000,000 2,500,000 250,000 250,000 450,000 2,350,000 Additional information: a. The ordinary share warrants outstanding account resulted from company's issuance of 5,000, P1,000 12% bonds with detachable warrants on June 30, 2020. The bonds which pay annual interest every December 31 were issued at total lump sum of P5,700,000. The bonds were quoted at 105 without the warrants while each warrant attached to each P1,000 bond were selling at P25. Five warrants surrendered together with P60 exercise price entitle the holder to acquire one ordinary share. Warrants can be exercised 2 years from date of the issuance. b. On March 1, 2021 4,000 treasury shares were issued at P70 per share and retired the remaining treasury shares. c. On April 15, 2021 stock rights were issued to ordinary shareholders. Ten stock rights plus P50 per share entitle the holder to acquire one additional ordinary share. d. On June 1, 60% of the warrants issued in 2020 were exercised. e. On August 15, all but 9,000 stock rights were exercised by the ordinary shareholders. f. Net Income for the year 2021 amounted to P1,250,000. Required: Compute for the following: 1. Correct balance of the ordinary share capital account as of December 31, 2021 2. Share premium resulting from the share issuance from the exercise of warrants 3. Total stockholders' equity as of December 31, 2021. Whitestone Co. had the following selected information in its December 31, 2020 Stockholders' Equity portion of its balance sheet: 10% Preference shares, P100 par value, 50,000 shares authorized, 10,000 shares issued and outstanding Ordinary shares, P50 par value, 100,000 shares authorized, 50,000 shares issued, 5,000 shares reacquired at P75 per share Share premium on preference shares Share premium on ordinary shares Ordinary share warrants outstanding Accumulated profits 1,000,000 2,500,000 250,000 250,000 450,000 2,350,000 Additional information: a. The ordinary share warrants outstanding account resulted from company's issuance of 5,000, P1,000 12% bonds with detachable warrants on June 30, 2020. The bonds which pay annual interest every December 31 were issued at total lump sum of P5,700,000. The bonds were quoted at 105 without the warrants while each warrant attached to each P1,000 bond were selling at P25. Five warrants surrendered together with P60 exercise price entitle the holder to acquire one ordinary share. Warrants can be exercised 2 years from date of the issuance. b. On March 1, 2021 4,000 treasury shares were issued at P70 per share and retired the remaining treasury shares. c. On April 15, 2021 stock rights were issued to ordinary shareholders. Ten stock rights plus P50 per share entitle the holder to acquire one additional ordinary share. d. On June 1, 60% of the warrants issued in 2020 were exercised. e. On August 15, all but 9,000 stock rights were exercised by the ordinary shareholders. f. Net Income for the year 2021 amounted to P1,250,000. Required: Compute for the following: 1. Correct balance of the ordinary share capital account as of December 31, 2021 2. Share premium resulting from the share issuance from the exercise of warrants 3. Total stockholders' equity as of December 31, 2021.

Answer rating: 100% (QA)

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