Question 1

Persons whose names are written in the articles of incorporation are called

Select one:

A. Corporators

B. Promoters

C. Incorporators

D. Subscribers

Question 2
Southern Company acquired 6,000 shares of its ordinary shares that were previously issued at P20 per share on February 5, 2018. It
sold 3,000 of these shares at P27 per share on April 1, 2018. The cost method is used to record treasury stock transactions. What
accounts should Southern credit in 2018 to record the sale of 3,000 treasury shares

Select one:

A. Treasury Stock for P60,000 and Retained Earnings for P21,000.

B. Treasury Stock for P81,000.

C. Treasury Stock for P72,000 and Retained Earnings for P9,000.

D. Treasury Stock for P60,000 and Share premium – Treasury for P21,000.

Question 3
Which of the following statements is correct?

Select one:

A. Rights issues usually do not have value and cannot be bought and sold in the market

B. Rights issues, once issued, seldom if ever lapse.

C. When rights are issued to existing shareholders, no disclosure of this needs to be made in the financial statements.

D. Between the declaration date and the ex-dividend date, the market price of the share includes the dividend.

Question 4
In January 2017, ; Southern Company a newly formed corporation issued 10,000 shares of its P10 par common stock for P15 per
share. On July 1, 2017, Southern Company reacquired 1,00o shares of its outstanding stock for P12 per share. The acquisition of
these shares

Select one:

A. decreased the number of issued shares.

B. increased total stockholders’ equity.

C. did not change total stockholders’ equity.

D. decreased total stockholders’ equity.

Question 5
Which of the following statements is false?

Select one:

A. A corporation has an enforceable contract with its shareholders in the declaration date of a cash dividend.

B. A formal declaration of as cash or property dividend constitutes an enforceable contract between the corporation and the
shareholders.

C. Property dividends are dividends that the corporation distributes on the form of noncash assets.
 D. When a company issues to its shareholders some shares of another corporation that currently are held as an investment, the
company is issuing a share dividend.
.

Question 6
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10 par value ordinary shares. The shares
will be issued on July 8, 2016. The market price of Evie Corporation stock is P15 per share on June 25, and July 8, 2016, the shares
were selling at P12 per share. The journal entry to record the declaration of the share dividend on June 25, 2016 will include a
Select one:

A. debit to retained earnings P900,000

B. credit to share premium, P300,000

C. debit to retained earnings P600,000

D. credit to share premium, P200,000

Question 7
Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par ordinary shares. During 2019, the entity
had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Under international financial reporting standard (IFRS), how much share premium in recorded by Evie Corporation on January 14?
120000
Answer:

Question 8
At December 31, 2015 and 2016, Evie Corporation had outstanding 2,000 shares of P1,000 par value, 6% cumulative preference
shares and 10,000 shares of P100 par value ordinary shares. At December 31, 2015, dividends in arrears on the preference shares
were P60,000. Cash dividends declared in 2016 totalled P220,000. What amount of dividends were payable to ordinary shareholders?
40000
Answer:

Question 9
The sale of treasury stock at an amount greater than cost results in a gain to be reported on the statement of recognized income and
expense.
Select one:

True

False

Question 10
Evie Corporation has 700,000 ordinary shares authorized and 300,000 shares outstanding at December 3,1 2018. The following
events occurred during 2019:
January 31 - declared 10% bonus issue.
June 30 - purchased 100,000 shares.
August 1 - reissued 50,000 shares.
November 30 - declared 2-for-1 share split.
At December 31, 2019, how many outstanding shares did Evie have?
560000
Answer:
Feedback
((300,000 + (10%*300,000) - 100,000 + 50,000)) x 2
2 for 1 share split means that the shareholder receives 2 new shares for every 1 share held
The correct answer is: 560000

Question 11
Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par ordinary shares. During 2019, the entity
had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Evie uses the cost method to account for its treasury share transactions. How much is debited to treasury stock on July 28, 2019?

80000
Answer:

__________ is an artificial person created by law.

Select one:

A. Partnership

B. Corporation

C. Sole proprietorship

D. Cooperative

Question 13

How much is Southern’s Shareholders’ Equity after the reissuance of the remaining treasury shares in 2018?

3465000
Answer:

Question 14
EFG reported the following on its December 31, 2015, statement of financial position; ordinary shares, no par, P200,000;
unappropriated retained earnings, P25,000; appropriation of retained earnings for bond sinking fund, P10,000; and reserve for possible
future inventory losses, P5,000. Therefore, the last line on the retained earnings statement, total appropriated and unappropriated
retained earnings should be:

Select one:

A. P55,000

B. P15,000

C. P10,000

D. P40,000

Question 15
At December 31, 2015 and 2016, Evie Corporation had outstanding 2,000 shares of P1,000 par value, 6% cumulative preference
shares and 10,000 shares of P100 par value ordinary shares. At December 31, 2015, dividends in arrears on the preference shares
were P60,000. Cash dividends declared in 2016 totalled P220,000. What amount of dividends were payable to preference
shareholders?
180000
Answer:
Question 16
 3455000
Answer:

Question 17
Southern Company issued 100,000 shares of P10 par common stock for P1,200,000. Southern reacquired 8,000 previously issued
shares at P15 per share. Three months later Southern sold 4,000 of the treasury shares at P19 per share. If the cost method is used to
record treasury stock transactions; to record the sale of the 4,000 treasury shares; Southern should credit

Select one:
A. Treasury Stock for P60,000 and Share premium – Treasury for P16,000

B. Treasury Stock for P40,000 and Share premium – Treasury for P36,000

C. Treasury Stock for P76,000.

D. Treasury Stock for P60,000 and Share premium, P16,000

Question 18
Which of the following statements is incorrect?

Select one:

A. A reverse share split increases the number of shares outstanding

B. When rights are issued to current shareholders, it may require more than one such right to later acquire one additional share
covered by the rights.

C. A share split results in the reduction of the par or stated value per share and a proportional increase in the number of shares
outstanding.

D. In a share split, only the content of contributed capital is changed, whereas in a share dividend the amount of contributed
capital is changed.

Question 19
Select one:

A. P9,310,000

B. P4,725,000

C. P9,450,000

D. P9,130,000

Question 20
Reissuing treasury stock at a price below cost results in

Select one:

A. A loss which is charge to retained earnings if there is no premium from treasury.

B. A loss which is a direct deduction to retained earnings.

C. A loss to be reported as a separate item in the Income Statement.

D. A loss which gives a restriction of retained earnings.

Question 21
The retirement of the 2,000 preference shares would decrease Share Premium Preference by

Select one:

A. P16,000

B. P60,000

C. P0

D. P20,000

Question 22
When the rights are issued to current shareholders, the number of rights to be issued per existing share will:

Select one:

A. Usually be only one right per share already held

B. Vary depending on the number per share already held, as determined and announced by the corporation

C. Be the number of rights needed to obtain one additional share multiplied by the number of shares already held.

D. Depend on the number purchased by existing shareholders.

Question 23
Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following transactions took place during 2017, the
first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.
At the end of Fern’s first year, legal capital amounts to

100000
Answer:

Question 24
In 2019, Evie Corporation issued 5,000 shares of P10 par value ordinary shares for P100 per share. In 2020, Evie reacquired 2,000 of
its shares at P150 per share from the estate of one of its deceased officers and immediately canceled/retired these 2,000 shares. In
connection with the retirement of these 2,000 shares, Evie should debit Retained Earnings for
Select one:

A. P180,000
 B. P100,000

C. P0

D. P280,000

Question 25

2400000
Answer:

Question 26

3460000
Answer:

Question 27
Evie Corporation issued 20,000 shares of P5 par ordinary shares at P10 per share. On December 31, 2019, Evie's retained earnings
were P300,000. In March 2020, Evie reacquired 5,000 shares of its ordinary shares at P20 per share. In April 2020, Evie sold 1,000
of the treasury shares to its corporate officers for P25 per share. Profit for the year 2020 was P60,000. At December 3,1 2020, Evie
should report Retained Earnings at
360000
Answer:

The gain on sale of the 1,000 treasury stock is credited to Share Premium from Treasury Stock.
The correct answer is: 360000

Question 28
On April 15, 2020, Evie Corporation splits its ordinary shares 5-for-1 when the market value was P100 per share. Prior to the split,
Evie had 10,000 shares of P10 par value ordinary shares issued and outstanding. After the split, the par value of the share
Select one:

A. was reduced to P2

B. remained at P10

C. was reduced to P8

D. was reduced to P5

Question 29
The primary source of stockholders equity is
Select one:

A. income retained by the corporation.

B. contributions by stockholders.

C. appropriated retained earnings.

D. both income retained by the corporation and contributions by stockholders.

.

Question 30
Evie Corporation's outstanding shares at December 31, 2019 consisted the following:
30,000 shares of 5% cumulative preference shares, P10 par value, fully participating as to dividends. No dividends were in arrears.
200,000 ordinary shares, P1 par value.
On December 15, 2016, Evie declared dividends of P100,000. What was the amount of dividends payable to preference shareholders?

60000
Answer:

Question 31
Which of the following statements is false?

Select one:

A. The ex-dividend date is the day following the date record.

B. Liquidating dividends represent a return of income to the shareholders.

C. A share dividend, but not a cash dividend, usually causes a decrease in retained earnings and an increase in contributed
(permanent) capital of the corporation.

D. Liability dividends arise when the board of directors declares a dividend and issues promissory notes, bonds, scrip or other
long-term indebtedness to the shareholders in lieu the date of record.
.

Question 32
A corporation is managed by its __________.

Select one:

A. Partners

B. Auditor

C. Board of Directors

D. None of these

Question 33
Evie Corporation has 5,000 shares of 6% cumulative, P100 par value, preference shares outstanding and 175,000 ordinary shares
outstanding. The corporation has paid no dividends since May 31, 2015. For the year ended May 31, 2017, Evie had reported a profit
of P1,450,000 and wishes to pay ordinary shareholders a dividend equivalent t0 25% of profit. The total amount of dividends to be
paid by Evie Corporation at May 31, 2017 is
422500
Answer:

Question 34
1st Statement: All incorporators are shareholders but not all shareholders are incorporators.
2nd Statement: The authorized shares represent the maximum number of shares that a corporation may issue.

Select one:

A. Both statements are correct.

 B. Only the first statement is correct.

C. Both statements are incorrect.

D. Only the second statement is correct.

Question 35
Evie Corporation has 10,000 shares of 7% P50 par preference shares, and 100,000 shares of P4 par ordinary shares outstanding. Two
years' preference dividends are in arrears. Evie declared cash dividend large enough to pay the preference dividends in arrears, the
preference dividends for the current period, and a P1.50 dividend to ordinary. What is the total amount of dividends to be paid by
Evie Corporation?
Select one:

A. P255,000

B. P105,000

C. P220,000

D. P150,000

Question 36
The Southern Company repurchased its own shares of common stock. The relevant information is given below:
Number of shares repurchased: 5,000 shares
Par value per share of US Company: $10
The price at which shares were repurchased: $20 per share
Based on the above information, the journal entry to record the repurchase of 5,000 shares under cost method would be:
Select one:

A. Common stock 100,000 Dr; Cash 100,000 Cr.

B. Common stock 50,000 Dr; Cash 50,000 Cr.

C. Treasury stock 100,000 Dr; Cash 100,000 Cr.

D. Treasury stock 50,000 Dr; Cash 50,000 Cr.

Question 37
A company issued rights to its existing shareholders to purchase, for P50 per share, unissued share of P15 par value. When the rights
lapse,
Select one:

A. Additional paid-in capital will be debited.

B. No entry will be made.

C. Stock rights outstanding will be debited.

D. Additional paid-in capital will be credited.

Question 38
Evie Corporation has 200,000 shares of P10 par value ordinary shares outstanding on December 31, 2015. On January 2, 2016, Evie
declared a share divided of 10,000 shares when the fair market value is P18. On the date of record, February 3, 2016, the share price
is P15. The shares are issued on March 1, 2016 when the market value of the shares is P25.
When Evie Corporation records the journal entry for the share dividend, retained earnings will be debited for the number of new
shares multiplied by which of the following amounts?
Select one:

A. market value of the shares on February 3, 2016

B. market value of the shares on March 1, 2016

C. market value of the shares on January 2, 2016

D. par value of shares

Question 39

Select one:

A. P1,140,000

B. P1,160,000

C. P1,116,000

D. P1,220,000

Question 40
Southern Company purchased its own par value stock on January 1, 2017 for P20,000 and debited the treasury stock account for the
purchase price. The stock was subsequently sold for P12,000. The P8,000 difference between the cost and reissue price should be
recorded as a deduction from

Select one:

A. net income.

B. retained earnings.

C. Share premium to the extent that previous net gains from sales of the same class of stock are included therein, otherwise; from
retained earnings.

D. Share premium without regard as to whether or not there have been previous net gains from sales of the same class of stock
included therein.

Question 41
In case of no-par shares, legal capital is the total consideration received by the corporation for the issuance of its shares to the
shareholders but this would necessarily exclude the excess of issue price over the stated value.
Select one:

True

False

Question 42
The Southern company issued 5,000 shares of its P10 par value common stock. These shares were issued at a price of P25 per share.
The correct journal entry to record this transaction is:

Select one:

A. Cash P50,000 Dr; Ordinary Shares P50,000 Cr.

B. Cash P125,000 Dr; Ordinary Shares P50,000 Cr; Share Premium - Ordinary Shares P75,000 Cr.

C. Common stock P50,000 Dr; Share Premium - Ordinary Shares P75,000 Dr; Cash P125,000 Cr.

D. Cash P125,000 Dr; Common stock P125,000 Cr.

Question 43
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares - P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160 per share. The shares were issued
on April 15, 2019 when the shares were selling at P180 per share. For the four months ended April 30, 2019, Evie sustained a loss of
P320,000. The balance of retained earnings of Evie at March 31, 2019 should be
996000
Answer:

Question 44

A. P7,250,000

B. P7,100,000

C. P8,600,000

D. P8,750,000

Question 45
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10 par value ordinary shares. The shares
will be issued on July 8, 2016. The market price of Evie Corporation stock is P15 per share on June 25, and July 8, 2016, the shares
were selling at P12 per share. The journal entry on June 25, 206, will include a credit to ordinary shares distributable in the amount of
Select one:

A. P600,000

B. P300,000

C. P200,000

Question 46
Evie Corporation’s performance during the last there years had not been favorable resulting to a deficit of P950,000 at December
decided to eliminate the deficit through a quasi-reorganization which would be effected follows: The company’s 200,000. P20 Par
ordinary share capital originally issued at an average price of P22 would be reissued with par value of P15. Immediately after quasi-
reorganization, what would be the balance of share premium?

Select one:
 A. P600,000

B. P450,000

C. P1,400,000

D. P1,000,000

Question 47
Which of the following cannot be a component of stockholders’ equity section of the balance sheet?

Select one:

A. Long term loan

B. Retained earnings

C. Additional paid-in capital

D. Treasury stock

Question 48
On May 1, 2019, Evie Corporation declared and issued a 10% ordinary share dividend. Prior to this dividend, Evie had 100,000
shares of P1 par value ordinary shares issued and outstanding. The fair market value of Evie's ordinary shares was P30 per share on
May 1, 2019. As a result of the share dividend, Evie's shareholders' equity
Select one:

A. increased by P300,000

B. decreased by P300,000

C. decreased by P10,000

D. did not change

Question 49
Evie Corporation was organized on January 2, 2019 with P50,000 authorized shares of P5 par ordinary shares. During 2019, the entity
had the following capital transactions:
January 14 - issued 20,000 shares at P11 per share.
July 28 - repurchased 5,000 shares at P16 per share.
Dec. 5 - reissued the 5,000 shares held in treasury for P19 per share.
Assume Evie Corporation records treasury stock at cost. The entry to record the reissuance of the 5,000 treasury shres on December 5
would include credit to

Select one:

A. Treasury stock in the amount of P95,000

B. retained earnings in the amount of P15,000

C. Share premium in the amount of P15,000

D. gain on sale in the amount of P15,000

Question 50
Which of the following best describes a possible result of treasury stock transactions of a corporation?

Select one:

A. May decrease but not increase retained earnings.

B. May increase net income if the cost method is used.

C. May increase but not decrease retained earnings.

 D. May decrease but not increase net income.

Question 51
When preference shareholders have the right to receive a specified dividend an to receive more after a matching dividend percentage
is given to ordinary shareholders, the preference shares are said to be
Select one:

A. participating

B. callable

C. convertible

D. cumulative

Question 52
Treasury shares are

Select one:

A. issued but not outstanding shares.

B. shares held as an investment by the treasurer of the corporation.

C. issued and outstanding shares.

D. shares held as an investment of the corporation.

Question 53
Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following transactions took place during 2017, the
first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.

At the end of the Fern’s first year, total paid-in capital amounts to

190000
Answer:

Question 54
Which of the following statements is correct?

Select one:

A. A share dividend (declared and issued) does not change the total assets, total liabilities, or total shareholders’ equity of the
issuing corporation.

B. When a corporation declares a small share dividend, it should capitalize the par value of the shares.

C. A share dividend and a share split are identical in all respects for the corporation issuing the dividend or splitting the share.

D. A large share split should be accounted for by capitalizing the current market value of the share.

Question 55
Treasury stock is a(n)

Select one:

A. asset account

B. liability account

C. contra equity account

D. none of the above

Question 56
When treasury stock is purchased for more than the par value of the stock and the cost method is used to account for treasury stock;
what accounts should be debited?

Select one:

A. Paid in capital in excess of par for the purchase price.

B. Treasury stock for the par value and paid in capital in excess of par for the excess of the purchase price over the par value.

C. Treasury stock for the purchase price.

D. Treasury stock for the par value and retained earnings for the excess of the purchase price over the par value.

Question 57
Evie Corporation's outstanding shares at December 31, 2019 consisted the following:
30,000 shares of 5% cumulative preference shares, P10 par value, fully participating as to dividends. No dividends were in arrears.
200,000 ordinary shares, P1 par value.
On December 15, 2016, Evie declared dividends of P100,000. What was the amount of dividends payable to ordinary shareholders?
40000
Answer:

Question 58
Choose the most correct statement regarding a 2-for-1 share split and a 100% share dividend.

Select one:

A. Both cause the same reduction in retained earnings.

B. Neither affect par value.

C. Both double the number of shares outstanding.

D. Only one effects contributed capital in excess of par on ordinary shares.

E. Both cause a significant increases in the ordinary shares account.

Question 59
The cost of treasury stock is deducted from total share capital and retained earnings in determining total shareholders' equity.
Select one:

True

False

Question 60
Evie Corporation was organized on January 1, 2014 at which date it issued 100,000 shares of P10 par ordinary shares at P15 per
share. During the period January 1 to December 31, 2016, Evie reported profit of P450,000 and paid cash dividends of P230,000. On
January 10,2 016, Evie purchased 6,000 shares of its ordinary shares at P12 per share. On December 31, 2016, Evie sold 4,000
treasury shares at P8 per share and retired the remaining treasury shares. What is Evie's total shareholders' equity at December 31,
2016?
Select one:

A. P1,704,000

B. P1,688,000

C. P1,720,000

D. P1,680,000

Question 61
The shares of common and preferred stock that have been issued and outstanding are reported in which section of balance sheet?
Select one:

A. Fixes assets section

B. Stockholders' equity section

C. Liabilities section

D. Current assets

Question 62
Evie Corporation had 100,000 ordinary shares issued and outstanding on January 1, 2019. During 2019, the following transactions
occurred:
March 15 - declared 2-for-1 share split when the fair market value of the shares was P80.00 per share.
December 15 - declared P0.50 per share cash dividend.
In Evie's statement of changes in shareholders' equity for 2019, what amount should Evie report as dividends?
100000
Answer:

Question 63
On September 1, 2017, Southern Company reacquired 12,000 shares of its P10 par value ordinary shares for P15.00 per share. Jade
uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should be a debit

Select one:

A. Treasury Stock for P120,000.

B. Ordinary Shares for P120,000

C. Ordinary Shares for P120,000 and Share Premium for P60,000.

D. Treasury Stock for P180,000.

Question 64
Evie Corporation has 200,000 shares of P10 par value ordinary shares outstanding on December 31, 2015. On January 2, 2016, Evie
declared a share divided of 10,000 shares when the fair market value is P18. On the date of record, February 3, 2016, the share price
is P15. The shares are issued on March 1, 2016 when the market value of the shares is P25.
When recording the journal entry to declare the share dividend, Evie will credit share premium of
Select one:

A. P150,000

B. P100,000

C. P50,000

D. P80,000

Question 65
Which of the following represents the total number of shares that a corporation may issue under the terms of its Articles of
Incorporation?

Select one:

A. outstanding shares

B. issued shares

C. unissued shares

D. authorized shares

Question 66
Evie Corporation's statement of financial position reported the following shareholders' equity:
5% cumulative preference shares, P100 par, 2,500 shares issued and outstanding - P250,000
Ordinary shares, P3.50 par, 100,000 shares issued and outstanding, P350,000
Share premium ordinary - P125,000
Retained earnings - P300,000
Dividends in arrears on the preference shares amounted to P25,000. If Evie were to be liquidated, the preference shareholders would
receive par value plus a premium of P50,000. The book value per share of ordinary shares is
Select one:

A. P7.00

B. P7.75

C. P7.50

D. P7.25

Question 67
Sometime companies buyback their own shares which are known as:

Select one:

A. common stock

B. treasury stock

C. holding stock

D. acquired stock

Question 68
Evie Corporation has issued 200,000 shares of P1 par value ordinary shares at P15. it is repurchases 5,000 shares during 2019 at P20
Select one:

A. profit would decrease by P100,000

B. profit would decrease by P25,000

C. shareholders' equity would decrease by P100,000

D. shareholders' equity would decrease by P25,000

Question 69
The excess price received on the par value of ordinary shares should be credited to __________.

Select one:

A. Subscriptions Receivable

B. Ordinary Shares

C. Share Premium

D. None of these

Question 70
Participating preference share means that
Select one:

A. Ordinary shareholders receive the dividend rate per share equal to the preference share and all excess dividends are given to
the ordinary shareholder.

B. Preference shareholders receive their full dividend and any excess is given to the ordinary shareholders.

C. Ordinary shareholders receive a dividend rate per share equal to the preference share and all excess dividends are shared
proportionately between the two classes.
 D. Ordinary shareholders receive a dividend rate per share equal to the preference share and all excess dividends go to the
preference shareholders. .

Question 71
A person who purchases ordinary shares of a corporation is known as:

Select one:

A. bond holder

B. ordinary stockholder

C. preferred stockholder

D. creditor

Question 72
If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously acquired for P280 per share and there
wasn't any Share Premium - Treasury, it would debit
Select one:

A. Loss on sale of treasury stock, P8,000

B. Retained earnings for P8,000

C. Treasury Stock for P8,000

D. Share premium - ordinary for P8,000

Question 73
Evie Corporation was incorporated on January 1, 2015 with the following authorized capitalization:
200,000 shares of Ordinary Shares, no par, stated value P100 per share
200,000 shares of 10% cumulative preference shares, P50 par value per share
During 2015, Evie issued 150,000 ordinary shares for a total of P18,000,0000 and 50,000 preference shares at P60 per share. In
addition, on December 15, 2015, subscriptions for 20,000 preference shares were taken at a purchase price of P100. These subscribed
shares were paid for on January 2, 2016. Profit for 2015 was P5,000,000. What should Evie report as total contributed capital on its
December 31, 2015 statement of financial position?
23000000
Answer:

18,000,000 + (50,000*60) + (20,000*100)

Normally, subscriptions receivable is shown as a reduction from the related subscribed shares, but when it is collectible within one
year, this may be shown as part of current asset.

The correct answer is: 23000000

Question 74

4850000
Answer:

Question 75
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares - P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 25% share dividend when the shares market value was P160 per share. The shares were issued
on April 15, 2019 when the shares were selling at P180 per share. For the four months ended April 30, 2019, Evie sustained a net
income of P320,000. The balance of retained earnings of Evie at March 31, 2019 should be

1555000
Answer:

Question 76
Evie Corporation declared the regular quarterly dividend of P2.00 per share. Evie had issued 12,000 ordinary shares and subsequently
reacquired 2,000 shares as treasury stock. what would the total amount of dividends to be distributed?
20000
Answer:

Question 77
_________ is the first stage in the formation of a corporation.

Select one:

A. Incorporation

B. Commencement

C. Promotion

D. Capital Subscription

Question 78
A person who purchases preferred stock of a corporation is known as:

Select one:

A. preferred stockholder

B. preferred owner

C. preferred investor

D. preferred creditor

Question 79
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares - P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160 per share. The shares were issued
on April 15, 2019 when the shares were selling at P180 per share. For the four months ended April 30, 2019, Evie sustained a net
income of P320,000. The balance of retained earnings of Evie at March 31, 2019 should be

1636000
Answer:

Question 80
Who is known as the real owner of the corporation?

Select one:

A. A preferred stockholder

B. A creditor

C. A common stockholder

D. A director

Question 81
Southern Company has 50,000 shares of P10 par ordinary shares authorized. The following transactions took place during 2017, the
first year of the corporation’s existence:
Sold 5,000 shares of ordinary for P18 per share.
Issued 5,000 shares ordinary shares in exchange for a patent valued at P100,000.
At the end of Fern’s first year, total share premium from ordinary shares amounted to

90000
Answer:

Question 82

3385000
Answer:

Question 83
Evie Corporation's Shareholders' Equity accounts at December 31, 2019 were as follows:
Ordinary Shares, P20 par, P8,000,000
Share premium, P2,400,000
Retained earnings, P1,275,000
All ordinary shares outstanding at December 31, 2019 were issued in 2017 for P26 a share. On January 4, 2020, Evie reacquired
20,000 of its ordinary shares at P24 a share and retired them. Immediately after the shares were retired, the balance in share premium
was
2320000
Answer:

Question 84
What does an appropriation of retained earnings and a declaration of cash dividend (for the same amount) have in common?

Select one:

A. Both permanently reduce future ability to pay dividends

B. Both have the same consequences for shareholders.

C. Both increase the amount of appropriated retained earnings.

D. Both result in a decrease in unappropriated retained earnings.

Question 85
At the end of the accounting year, December 31, 2019, Evie’s records reflected the following:
Ordinary shares, no par, 5,000 shares issued, issued price P12 per share
Preference shares, par P5, 1,000 shares issued and outstanding; issue price, P15 per share
Unrealized gain, securities available for sale, P18,000
Retained earnings, P20,000 (unappropriated)
Preference shares, par P5, subscribed (not yet issued), 400 shares; subscription price P20 per share
Subscriptions receivable on the preference shares P5,000 to be collected on January 1, 2020
Reserve for bond sinking fund, P15,000
Treasury shares, ordinary shares, 1000 shares, cost P10 per share.
Total shareholders’ equity is:
Select one:

A. P121,000

B. P126,000

C. P125,000

D. P120,000

E. P136,000

Question 86
Gains on sales of treasury stock using the cost method should be credited to

Select one:

A. capital stock.

B. retained earnings.

C. Share premium from treasury stock.

D. other income

Question 87
If share capital is issued for an outstanding liability, the fair market value of the share capital issued should be the measure for
recording.
Select one:

True

False
Question 88
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares - P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160 per share. The shares were issued
on April 15, 2019 when the shares were selling at P180 per share. For the four months ended April 30, 2019, Evie sustained a net
income of P320,000. The total shareholders' equity of Evie at March 31, 2019 should be

3840000
Answer:

Question 89
The purchase of treasury stock will result in
Select one:

A. a decrease in assets and a decrease in liabilities

B. a decrease in one asset account and an increase in a different asset account

C. a decrease in assets and decrease in shareholders' equity

D. no changes in assets, liabilities, and shareholders' equity

Question 90
The following information is available for Evie Corporation: Ordinary shares, P80,000 (P80 par); Share Premium, P200,000; and
Retained earnings, P400,000. Assuming only one class of share, the book value of share is
680
Answer:

Question 91
Question text
Which of the following is not true about treasury stock?

Select one:

A. Shares held as treasury stock are not entitled to assets upon liquidation

B. Shares held as treasury stock include shares that has been retired or cancelled

C. Shares held as treasury stock are not entitled to dividends

D. Shares held as treasury stock has no voting right

Question 92
On April 10, 2018, Southern Company issued 2,000 shares of its P10 par value ordinary shares in exchange for a piece of land to be
held for future plant site. Southern Company’s ordinary shares has a fair market value of P27 per share on April 10. The land has no
known market value. How much is the increase in ordinary shares premium resulting from this exchange?

34000
Answer:

Question 93
For a corporation type of business, total assets on a balance sheet prepared on any date must agree with which of the following?

Select one:

A. The sum of total liabilities and contributed capital

B. The sum of total liabilities and contributed capital

C. The sum of total liabilities and net income as shown on the income statement

D. The sum of total liabilities and contributed capital and retained earnings

Question 94
Stockholders equity is generally classified into two major categories:

Select one:

A. contributed capital and appropriated capital.

B. Paid in capital and retained earnings.

C. appropriated capital and retained earnings.

D. retained earnings and unappropriated capital.

Question 95
On May 1, 2016 Evie Company issued P2 Million, 20-year, 10% bonds for P2,120,000. Each P1,000 bond had a detachable warrant
eligible for the purchase of one share of Evie’s P50 par ordinary share for P60. Immediately after the bonds were issued, Evie’s
securities had the following market values: 10% bonds without warrants – P1,040; Warrants – P20; Ordinary Share P50 par –
P56. What amount should Evie record as part of equity as a result of the foregoing?

Select one:

A. P 80,000

B. P 40,000

C. P0
D. P120,000

Question 96
1st Statement: Organization cost is recorded as an asset.
2nd Statement: When ordinary shares with par value are sold, the proceeds should be credited to the ordinary shares account in full.

Select one:

A. Both statements are correct.

B. Only the first statement is correct.

C. Both statements are incorrect.

D. Only the second statement is correct.

Question 97
Select one:

A. In accounting for dividends, the declaration date is the most important date because dividends are paid to whomever owns the
shares on that date.

B. Dividends in arrears on cumulative preference shares constitute a liability to the corporation that should be recorded (accrued)

C. A small share dividend is defined as a dividend which increases the number of outstanding shares by 10 percent or less.

D. Courts generally have held that, in the absence of fraud or illegality, formal announcement of the declaration of a cash,
property, or scrip dividend constitutes an enforceable contracts (irrevocable declaration) between the corporation and the
shareholders.

The correct answer is: Courts generally have held that, in the absence of fraud or illegality, formal announcement of the declaration of
a cash, property, or scrip dividend constitutes an enforceable contracts (irrevocable declaration) between the corporation and the
shareholders.

Question 98
Statement 1: The balance in the Share Premium account must be added tot he balance of the Ordinary Shares account to compute the
amount of legal capital for a corporation with a par value ordinary shares.
Statement 2: If share capital is issued for non-cash consideration, the proceeds is recorded at an amount equal to the following in the
order of priority: (1) fair market value of share capital issued, (2) fair market value of non-cash consideration received, and (3) par or
stated value of the share capital issued.
Select one:

A. Both statements are correct.

B. Only the first statement is correct

C. Only the second statement is correct

D. Both statements are incorrect

In case of par value shares, legal capital is the aggregate par value of all issued and subscribed shares. In case of no par shares, legal
capital is the total consideration received by the corporation for the issuance of its shares including the excess of issue price over the
stated value.

Order of priority for non-cash considerations: (1) fair value of non-cash consideration received, (2) fair value of shares issued, and (3)
par/stated value of shares issued
Question 99
What is the purpose of a share split?
Select one:

A. To adjust the market price of the corporation's shares to a level where more individuals can afford to invest in the stock.

B. To spread shareholder based by increasing the number of outstanding shares.

C. To decrease the number of shares outstanding thereby increasing proportionately the par value.

D. Both A and B.

Question 100
On December 31, 2018, the shareholders' equity of Evie Corporation was as follows:
Ordinary shares, par value P100, authorized 30,000 shares, issued and outstanding 9,000 shares - P900,000
Share Premium - P1,160,000
Retained earnings - P1,460,000
On March 31, 2019, Evie declared a 10% share dividend when the shares market value was P160 per share. The shares were issued
on April 15, 2019 when the shares were selling at P180 per share. For the four months ended April 30, 2019, Evie sustained a loss of
P320,000. The total shareholders' equity of Evie at March 31, 2019 should be

3200000
Answer:

Question 101
1st Statement: The owners of a stock corporation are called shareholders; the owners of a non-stock corporation are called members.
2nd Statement: Share premium for the excess of the stock subscription price over its par value or stated value is recorded at the time
full payment of subscription price is received by the corporation.

Select one:

A. Only the first statement is correct.

B. Both statements are correct.

C. Only the second statement is correct.

D. Both statements are incorrect.

Question 102
Evie Corporation has 5,000,000 ordinary shares and 1,000,000 shares of 6%,P100 par value cumulative preference shares. During the
recession of the past two years, Evie suspended all dividend payments. This year, Evie returned to profitability and the board of
directors declared a P1.00 dividend per share to ordinary shareholders to be paid at the end of the year. How much would Evie have
to pay in dividends this year?
Select one:

A. P23,000,000

B. P11,000,000

C. P5,000,000

D. P17,000,000

Question 103
Stock that has a fixed per share amount printed on each stock certificate is called a

Select one:

A. fixed value stock.

B. stated value stock

C. uniform value stock

D. par value stock

uniform value stock
.
Question 104
Southern Company was organized on January 1, 2018 with authorized capital of P2,000,000 consisting of 100,000 ordinary shares,
P20 par value. Subsequently, incorporators subscribed for 25,000 shares at P24. How much must be paid up upon subscription to
comply with the requirement of the Securities and Exchange Commission?

150000
Answer:
Question 105
In 2019, Evie Corporation issued 5,000 shares of P10 par value ordinary shares for P100 per share. In 2020, Evie reacquired 2,000 of
its shares at P150 per share from the estate of one of its deceased officers and immediately canceled/retired these 2,000 shares. In
connection with the retirement of these 2,000 shares, Evie should debit Share Premium of
Select one:
 a. P180,000

b. P100,000

c. P280,000

d. P20,000

Question 106
Evie Corporation has a total shareholders' equity of P1,000,000 including retained earnings of P190,000. The cash balance is
P350,000. The maximum cash dividend the corporation can declare and pay is
190000
Answer:

Question 107
On June 25, 2016, Evie Corporation issues a 30% share dividend on its 200,000 shares of P10 par value ordinary shares. The shares
will be issued on July 8, 2016. The market price of Evie Corporation stock is P15 per share on June 25, and July 8, 2016, the shares
were selling at P12 per share. On July 8, 2016, the share premium account is credited for
Select one:

A. P300,000

B. P0

C. P200,000

D. P600,000

Question 108
Which of the following statements is not true about preference shares?

Select one:

A. Stockholders' usually have a preference as to dividends

B. The rate of dividend is usually fixed

C. Stockholders always have a voting right

D. Stockholders' usually have a preference as to assets upon liquidation of the corporation

Question 109
The liability of shareholders of a corporation is __________.

Select one:

A. Limited to his/her contribution

B. Unlimited and may extend to his/her personal assets

C. Uncertain

D. All of the above

Question 110
In a corporate form of business organization, legal capital is best defined as

Select one:

A. the amount of capital the state of incorporation allows the company to accumulate over its existence.

B. the par value of all capital stock issued.

C. the total capital raised by a corporation within the limits set by the Securities and Exchange Commission.

D. the amount of capital the federal government allows a corporation to generate.