You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December...

 

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You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December 31, 2019. Glory Corp. was incorporated in early 2018 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, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at P50 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 Total shareholders' equity P 1,400,000 2,500,000 540,000 P.3.440,000 Your inquiries and investigation revealed the following transactions, which occurred in 2019: a. On January 15, the company reacquired 20, 000 ordinary shares (from the 2018 issue) at P22 per share and reverted them to treasury since it intends to reissue the same. Compute for the adjusted balances of the following as of December 31, 2019: 1. Ordinary shares. 2. Preference shares. 3. Share premium- Ordinary shares. 4. Share premium-Preference shares. 5. Share premium-Treasury shares 6. Total additional paid-in capital. 7. Total contributed capital b. On February 11, the company reissued 4,000 treasury shares at P28 per share. c. On March 5, the company reissued 6,000 treasury shares at P19 per share. d. On April 1, the company retired 5,000 treasury shares. e. On May 12, 20,000 preference shares were converted to ordinary shares. f. On June 9, 15,000 shares were subscribed for a total amount of P175,000 On July 4, a 2 for 1 share split was affected for the ordinary share. g. h. On August 8, the company reissued 3,000 treasury shares at P8 per share. The company issued 4,000 ordinary shares for P11 per share. i. j. The company registered an adjustments net income in 2019 at P830,000. You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December 31, 2019. Glory Corp. was incorporated in early 2018 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, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at P50 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 Total shareholders' equity P 1,400,000 2,500,000 540,000 P.3.440,000 Your inquiries and investigation revealed the following transactions, which occurred in 2019: a. On January 15, the company reacquired 20, 000 ordinary shares (from the 2018 issue) at P22 per share and reverted them to treasury since it intends to reissue the same. Compute for the adjusted balances of the following as of December 31, 2019: 1. Ordinary shares. 2. Preference shares. 3. Share premium- Ordinary shares. 4. Share premium-Preference shares. 5. Share premium-Treasury shares 6. Total additional paid-in capital. 7. Total contributed capital b. On February 11, the company reissued 4,000 treasury shares at P28 per share. c. On March 5, the company reissued 6,000 treasury shares at P19 per share. d. On April 1, the company retired 5,000 treasury shares. e. On May 12, 20,000 preference shares were converted to ordinary shares. f. On June 9, 15,000 shares were subscribed for a total amount of P175,000 On July 4, a 2 for 1 share split was affected for the ordinary share. g. h. On August 8, the company reissued 3,000 treasury shares at P8 per share. The company issued 4,000 ordinary shares for P11 per share. i. j. The company registered an adjustments net income in 2019 at P830,000.

Answer rating: 100% (QA)

To compute the adjusted balances of the various items in the shareholders equity of Glory Inc as of December 31 2019 lets go through each transaction ... View the full answer