A 62. Star Ltd. presents the following information from the Statement of Financial Position:EquityCapital (120,000120,000shares of £11 each)Retained ProfitsShare premium£120,000120,00022,00022,00050,00050,000Total EquityStar Ltd. issues 20,00020,000 ordinary shares for a price of £22. Considering the previous information and the economic transaction ofissuing ordinary shares, which of the following statements is correct?192,000192,000a.The company increases cash in £20,00020,000 and share premium decreases in the same amount.b.The company decreases cash in £40,00040,000 and total equity remains unchanged.C.The company increases cash in £40,00040,000 and equity increases in the same amount.d.None of the answers is true.

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Answered: Star Ltd. issues 20,00020,000 ordinary…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Blossom SA reported the following balances at December 31, 2019: share capital-ordinary €530,000, share premium-ordinary €115,000, and retained earnings €310,000. During 2020, the following transactions affected equity. 1. Issued preference shares with a par value of €140,000 for €247,000. 2. Purchased treasury shares (ordinary) for €45,000. Earned net income of €174,000. Declared and paid cash dividends of €52,000 3. 4. Prepare the equity section of Blossom SA's December 31, 2020, statement of financial position.
AB Co issues 5.000 50c shares for $6.000. Required: What are the amounts for share capital and share premium in the statement of financial position?
On 5 March 20X7, Marchant Ltd issued 200,000 5% irredeemable GHS 1 preference shares. In accordance with IAS 32 Financial Instruments: Presentation, how will these shares and their related dividend be shown in Marchant Ltd’s financial statements for the year ended 31 March 20X7? Shares Dividend A Non-current liabilities Income statement B Non-current liabilities Statement of changes in equity C Equity Income statement D Equity Statement of changes in equity
Star Ltd. presents the following information from the Statement of Financial Position: Equity £ Capital (120, 000 shares of £1 120,000 each) Retained Profits Share premium Total Equity 22,000 50,000 192,000 Star Ltd. issues 20, 000 ordinary shares for a price of £2. Considering the previous information and the economic transaction of issuing ordinary shares, which of the following statements is correct? O a. The company increases cash in £20,000 and share premium decreases in the same amount. O b. The company decreases cash in £40,000 and total equity remains unchanged. O c. The company increases cash in £40,000 and equity increases in the same amount. O d. None of the answers is true.
The net income of Zia company for the year ended December 31, 2018 amounted to P5,600,000. Determine the earnings per share of Zia in the following independent cases: a. The entity has only one class of share capital, 100,000 shares with par value of P100. The entity has two classes of share capital: Preference share, 10% cumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 b. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was declared. c. The entity has two classes of share capital: Preference share, 10% noncumulative, P100 par 4,000,000 Ordinary share, P100 par, 100,000 shares 10,000,000 The preference dividend for the current year was not declared.
Template Company provided the following concerning marketable equity securities held as "trading." 1. The entity carried the following securities on December 31, 2022: 2. On June 30, 2023, the entity sold all the B ordinary shares for P140,000. 3. On December 31, 2023, the securities are quoted as follows: A ordinary - 4,000 shares B ordinary - 1,000 shares C preference - 2,000 shares A ordinary - 4,000 shares C preference -2,000 shares Requirement: Complete the table below. Write zero (0) if it is not applicable. Statement of Financial Position Investments - FVPL Statement of Changes in Equity Retained earnings Statement of Income Unrealized gain/(loss) Realized gain/(loss) Acquisition Date [a] [d] [9] 0] Cost 330,000 200,000 300,000 830,000 Market P80 per share P180 per share December 31, 2022 300,000 160,000 310,000 770,000 [b] [e] [h] [k] December 31, 2023 [c] [U] 0 [0]
The following data are extracted from the shareholders’ equity section of the statement of financial position of Del Corporation: Ordinary shares, P2 par value – Balance as of December 31, 2010; P1,000,000. Ordinary shares, P2 par value – Balance as of December 31, 2011; P1,020,000. Share premium - Balance as of December 31, 2010; P500,000. Share premium - Balance as of December 31, 2011; P580,000. Retained earnings - Balance as of December 31, 2010; P1,000,000. Retained earnings - Balance as of December 31, 2011; P1,046,000. During 2011, the corporation declared and paid cash dividends of P150,000 and also declared and issued a share dividend. There were no other changes in shares issued and outstanding during 2011. What is the net income for 2011. Show solution
Before Riverbed Ltd. engages in the treasury share transactions listed below, its general ledger reflects, among others, the following account balances (par value is £30 per share). Share Premium-Ordinary Share Capital-Ordinary £91,700 £269,400 Retained Earnings (a) Bought 390 treasury shares at £39 per share. (b) Bought 300 treasury shares at £45 per share. (c) Sold 350 treasury shares at £41 per share. (d) Sold 100 treasury shares at £37 per share. £81,900 Record the treasury share transactions (given below) under the cost method of handling treasury shares; use the FIFO method for purchase-sale purposes. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
The Following is the summarised balance sheet of vikram ltd. as on 31.3.2021 Liabilities: 10% Redeemable preference share of $100 each $1,00,000 (less) calls in arrears $1,000 ($1,00,000-&1,000) $99,000 50,000 equity shares of $10 each fully paid $5,00,000 General reserve $1,00,000 Capital reserve $50,000 Creditors $1,51,000 Total $9,00,000 Assets : Sundry assets $8,10,000 Cash at bank $10,000 Investments $80,000 Total…
G. Shown below are account balances found in the ledger of Honesty Corporation at the end of year 2018: Subscription Receivable-Preference Share Subscription Receivable-Ordinary Share P 360,000 182,000 8% Preference Share Capital, P 50 par value, 80,000 shares authorized Issued P 1,440,000 Subscribed 720,000 2,160,000 Ordinary Share Capital, no par, P 10 stated value 320,000 shares authorized Issued P 1,360,000 Subscribed 280,000 1,640,000 Additional Paid In Capital Preference Share Premium P 216,000 Paid-In Capital In Excess of Stated Value 328,000 544,000 Required: Compute for the following: 1) Number of Preference shares issued 2) Number of Ordinary shares issued 3) Number of subscribed preference shares 4) Number of subscribed ordinary shares 5) Average price per share received by the corporation on its preference share capital including subscribed shares 6) Average price per share received by the corporation on its ordinary share capital including subscribed shares 7) Average…
The following figures have been extracted from the financial statements of KND Ltd: Book Value of Current Assets $45 million and Current Liabilities $34.75 million 11% Debentures: $27 million debentures issued at $1,000. Long-term Loan: $7.18 million Preference Share Capital: 8.8 million shares issued at $2 per share Retained Earnings: $28.30 million Ordinary Share Capital: 39 million shares issued at $1 per share General Reserves $9.20 million The following additional information has been provided by the manager of the company: Government bonds are currently yielding 6.3% per annum. The current market return on equity is estimated to be 13.5% per annum. Debenture coupons are paid annually, with 16 years to maturity. The company tax rate is 34%. The loan requires a 9% p.a. interest payment, compounded monthly. A merchant banker suggests that KND Ltd would have to offer a rate of 13.9% p.a. on any new issue of 16-year debentures. 12% Preference shares of KND Ltd are currently…
The following data were taken from the statement of financial position accounts of Cha-Cha Corporation on Dec 31, 2019. Current Assets $ 270,000 Investments $ 312,000 Share Capital - Ordinary (par Value $10) $ 300,000 Share Premium - Ordinary $ 75,000 Retained Earnings $ 420,000 Prepare the required Journal Entries for the following unrelated items! 1. A 5% share dividend is declared and distributed at a time when the market price of the shares is $39 per share. 2. The par value of the ordinary shares is reduced to $2 with a 5-for-1 share split. 3. A dividend is declared January 10, 2020 and paid January 28, 2020, in bonds held as an investment. The bonds have a book value of $ 0f $45,000 and a fair value $ 62,500.

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