Redemption of shares Redeemable shares (可贖回股份) Shares issued with redemption terms at a specified future date Share redemption/buy-back () ▶ The new Companies Ordinance allows greater flexibility for the share redemption or buy-back The payment for the redemption may be made: ▶ Out of proceeds of fresh issue of new shares ▶ Out of company's distributable profits ▶ Out of capital, following procedures prescribed in the new Companies Ordinance (New Co. Ord.)

What is the entry to record issuance of shares after all cash have been received from a share subscription, assuming an entry to record ordinary shares authorized was made at the time of incorporation? *         a. Dr. Subscribed ordinary shares and Cr. Ordinary shares       b. Dr. Subscribed ordinary shares and Cr. Ordinary shares as well as Share premium       c. Dr. Subscribed ordinary shares and Cr. Unissued ordinary shares       d. Dr. Subscriptions receivable and Cr. Subscribed ordinary shares as well as Share premium

Which statement is true concerning retirement of treasury shares. * Retired shares can be reissued at a future date Shares are retired when reacquired Retired shares are those that have been reacquired and cancelled Retired shares remain in the books of accounts of an entity The original issuance price is equal to: Par value only Related Share Premium only Par value less Related Share Premium Par value plus Related Share Premium

Which of the following statements is correct regarding working paper entries to facilitate the preparation of the consolidated financial statements? *   A. Debit Non-controlling Interest in Net Assets in the working paper to assign to the non-controlling stockholders their share in the gain on bargain purchase. b. Debit Share Premium relating to issuance of stocks in the working paper to record the cost of SEC registration and listing fees. c. Credit Investment in Subsidiary Company Stock in the working paper to record the purchase of outstanding shares from subsidiary company. d. Credit Equipment in the working paper to adjust a fair value differential of an overvalued equipment.

1. The issuer of an ordinary share dividend to ordinary shareholders should transfer from retained earnings to contributed capital an amount equal to the a. fair value of the shares issued. b. par or stated value of the shares issued. c. book value of the shares issued. d. minimum legal requirements.   2. Statement 1: Treasury shares are a company’s own shares that have been reacquired and retired.         Statement 2: The cost method records all transactions in treasury shares at their cost and reports the treasury shares as a deduction from ordinary shares. a. Only statement 1 is correct b. Only statement 2 is correct c. Both statements are correct d. Both statements are incorrect.   3. The declaration and issuance of a share dividend a. increases ordinary shares outstanding and increases total equity. b. increases retained earnings and increases total equity. c. decreases retained earnings but does not change total equity. d. may increase share premium but does not change total…

What is the entry to record the declaration of share split of the corporation? Recorded only through memo entry Recorded through journal entry Not recorded Either A or B When treasury shares are reissued at more than the reacquisition cost, the excess of the reissuance price over the cost is: * Debited to the "Share Premium - Treasury Shares" account Debited to the "Retained Earnings" account Credited to the "Share Premium - Treasury Shares" account O Credited to the "Retained Earnings" account

Multiple Choice Theories 1. EPS disclosures are a. Encouraged for all entities b. Required for all entities C. Encouraged for public entities and required for nonpublic entities. d. Required for public entities and encouraged for nonpublic entities. 2. Earnings per share is calculated before accounting for which of the following items? a. Preference share dividend for the period b. Taxation c. Non-controlling interest d. Ordinary share dividend 3. Undeclared dividends are deducted from profit or loss in the earnings per share computation for which type of preference shares? a. Non-cumulative only. b. Cumulative only. C. Neither non-cumulative nor cumulative. d. Both non-cumulative and cumulative 4. The following are considered returns to the preference shareholders and are deducted in calculating profit or loss attributable to ordinary equity holders, except a. Undeclared dividends for the period on cumulative preference b. Loss on settlement of preference shares. C. Amortization of…

1. Shares issued in connection with business combination are recorded at: A discount A premium Fair value Par value 2. Indirect costs related to acquisition of another entity is treated as An expense An investment account Share capital Share premium 3. The cost of registering equity securities in a business combination should be capitalized debited to share premium expensed

The Issue of shares to only the existing shareholders of the same company is known as; a.Private Placement b.Offer for sale c.Right issues d.Public issue

Discuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. a. outstanding preference shares issued at a premium with a par value liquidation right. b. the exercise at a price below market value but above book value of an ordinary share option issued during the current fiscal year to officers of the corporation. c. the replacement of a machine immediately prior to the close of the current fiscal year at a cost of 20% above the original cost of the replaced machine. the new machine will perform the same function as the old machine that was sold for its book value.