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Acctg07 FQ3

Acctg07 FQ3

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Published by: Patrick Ferdinand Alvarez on Oct 24, 2011
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04/29/2012

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FINANCIAL ACCOUNTING AND REPORTING IIFINAL QUIZ 2/3
 1.
 
The accounts shown below appear in the December 31, 2003 trial of Hollow Corporation: Preferred stock, authorized P0 par
 
P10,000,000
 
Unissued preferred stock 
 
3,600,000
 
Common stock, authorized P20 par
 
4,000,000
 
Unissued common stock 
 
2,000,000
 
Subscription receivable, preferred stock 
 
380,000
 
Subscription receivable, common stock 
 
360,000
 
Subscribed preferred stock 
 
600,000
 
Subscribed common stock 
 
440,000
 
Treasury stock, preferred, at cost
 
1,360,000
 
Additional paid-in capital
 
1,700,000
 
Retained earnings
 
2,000,000
 
All subscription receivables are due in year 2004. How much is the totalstockholder
s equity of Hollow Corporation?a. 11,040,000b.
 
11,780,000
 
c.
 
12,400,000
 
d.
 
13,760,000
 
2.
 
Compute for the Stockhold
er’
s Equity using the following data; Bonds payable
 
P300,000
 
Additional paid-in capital on common stock 
 
50,000
 
Donated capital
 
40,000
 
Treasury stock at cost
 
20,000
 
Common stock, par P100
 
500,000
 
Common stock option warrants
 
100,000
 
Investments in marketable securities
 
70,000
 
Additional paid-in capital from treasury stock 
 
15,000
 
Retained earnings
 
135,000
 
a.
 
720,000
 
b.
 
760,000
 
c.
 
820,000
 
d.
 
860,000
 
3.
 
The Magic Lamp Corporation was incorporated on January 1, 2002, with following authorizedcapitalization:
·
40,000 shares of common stock, no par value, stated value P40 per share
·
10,000 shares of 5% cumulative preferred stock, par value of P10 per shareDuring 2002, Magic Lamp issued 24,000 shares of common stock for a total of P1,200,000 and6,000 shares of preferred stock at P16 per share. In addition, on December 19,2002, subscriptionsfor 2,000 shares of preferred stock were taken at a purchase price of P17. These subscribed shares werepaid for on January 4, 2003. What should Magic Lamp report as total contributed capital on its December31,2002 balance sheet? a.
 
1,040,000
 
b.
 
1,262,000
 
c.
 
1,296,000
 
d.
 
1,330,000
 
4.
 
The stockholder
s’
equity of May Co. revealed the following on January 1, 2007: Preference Share,P100 par value P230,000Paid-in Capital in Excess of Par - Preference 80,500Ordinary Share, P15 par value 525,000
 
Paid-in Capital in Excess of Par
 – 
Ordinary
 
275,000
 
Subscribed Ordinary Share
 
5,000
 
Retained Earnings
 
190,000
 
Notes Payable
 
400,000
 
Subscription Receivable
 — 
Ordinary
 
40,000
 
How much is the legal capital of the company?a.
 
P1.3055M
 
c.
 
P0.76M
 
b.
 
P1.115M
 
d.
 
P0.755M
 
5.
 
Queenie Corporation was incorporated on January 2, 2007. The followinginformation pertaining to Queeni
e’
s ordinary stock transactions:1/2/07 Number of shares authorized 80,0001/1/07 Number of shares issued 60,0007/1/07 Number of shares reacquired but not canceled 5,00012/1/07 Two-for-one stock splitWhat is the number of shares of Queeni
e’
s ordinary share outstanding at December31, 2007? a.
 
150,000
 
c. 115,000
 
b.
 
120,000
 
d. 110,000
 
6.
 
Corridor Company issued 6,000 shares of its P10 par common stock to Max L. ascompensation for 1,000 hours of legal services performed. Max L. usually bills P500 perhour for legal services. On this data of issuance, the stock was selling at a public trading atP150 per share.By what amount should the additional paid in capital account of Corridor Company willincrease as a result of the issuance of those shares?a. 60,000b. 440,000c. 900,000d. 3,000,0007.
 
On July 1, 2003, Boom exchanged 2,600 shares of its p24 par value stock for land. A fewmonths ago, the land was appraised by an independent appraiser at P100,000. Boom iscurrently trading at the stock exchange at P45. Earnings per share is P40. How much shouldbe debited to Land account?a. P 62,400b. P100,000c. P104,000d. P117,0008.
 
In 2006, Inna Corporation acquired 6,000 shares of its Pl0 par value ordinary shares at P36per share. During 2007, Inna issued 3,000 of these shares at P50 per share. Inna uses thecost method to account for its treasury stock transactions. What accounts and amounts shouldInna credit in 2007 to record the issuance of the3,000 shares? Treasury
 
Additional
 
Retained
 
Common
 
a.
 
Stock -
 
Paid-in CapitalP102,000
 
EarningsP42,000
 
Stock P6,000
 
b.
 
-
 
P144,000
 
-
 
P6,000
 
c.
 
P108,000
 
P 42,000
 
-
 
-
 
d. P108,000 - P 42,000 -9.
 
Way Co. reported the following in its statement of equity on January 1, 2007:Ordinary Share, PS par value, 200,000 sharesauthorized; 100,000 shares issued P 500,000Additional Paid-in Capital 1,500,000Retained Earnings 516,000P2,516,000Less Treasury Stock, 5,000 shares at cost 40,000Total shareholder
s’
equity P2,476,000 
 
 
The following events occurred in 2007:May 1 1,000 shares of treasury stock were sold for P10,000.July 9 10,000 shares of previously unissued ordinary share were sold for P12 pershare.October 1 The distribution of a 2-for-1 stock split resulted in the ordinary sh
are’
s parvalue being halved.Jennifer accounts for treasury stock under the cost method.How many shares are issued and outstanding at December 31, 2007?a. 220,000 and 216,000b. 220,000 and 212,000c. 110,000 and 106,0900d. 100,000 and 95,00010.
 
Compute for the Stockhold
er’
s Equity using the following data;Bonds payable
 
P300,000
 
Additional paid-in capital on common stock 
 
50,000
 
Donated capital
 
40,000
 
Treasury stock at cost
 
20,000
 
Common stock, par P100
 
500,000
 
Common stock option warrants
 
100,000
 
Investments in marketable securities
 
70,000
 
Additional paid-in capital from treasury stock 
 
15,000
 
Retained earnings
 
135,000
 
a.
 
720,000
 
b.
 
760,000
 
c.
 
820,000
 
d.
 
860,000
 
11.
 
Following are shown on the balance sheet of Pay Company: Capital Stock, P100 par, 1,000 shares
 
P100,000
 
Premium on Capital Stock 
 
2,000
 
Additional Paid-in Capital from Treasury Stock 
 
3,000
 
Retained Earnings
 
75,000
 
Treasury Stock, 200 shares at cost
 
25,000
 
The whole 200 shares of treasury stock were sold for P20,000. How would the resale of thetreasury stock be recorded?a. Cash 20,000Treasury Stock 20,000 b.
 
Cash
 
20,000
 
Premium on Capital Stock 
 
2,000
 
Additional Paid-in Capital from Treasury Stock 
 
3,000
 
Treasury Stock 
 
25,000
 
c.
 
Cash
 
20,000
 
Retained Earnings
 
5,000
 
Treasury Stock 25,000
 
d.
 
Cash
 
20,000
 
Additional Paid-in Capital from Treasury Stock 
 
3,000
 
Retained EarningsTreasury Stock 
 
2,000
 
25,000
 
12. On July 1, 2005, Alto Corporation declared a 1 for 5 reverse stock split, when the marketvalue of stock was P100 per share. Prior to the split, Alto had P1,000,000 credited tocapital stock, divided into 100,000 shares issued and outstanding. After the split, the par valueof the stock isa. 2 b. 10 c. 20 d. 5013. X grant of 30,000 stock appreciation rights enables key employees to receive cash equal tothe difference between P20 and the market price of the stock on the date each right is exercised.The service period is year 2000 through year 2002, and the rights are exercisable in

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