ACCOUNTING REVIEW- ACTIVITY 1

Answers

1. B. 2,200,000

PDP NCA
November 1, 2016 2,500,000
2,500,000
December 31, 2016 2,200,000
2,200,000
December 31, 2017 2,000,000
2,200,000
PDP NCA
November 1, 2016 2,500,000
2,500,000
December 31, 2016 2,200,000
2,200,000
December 31, 2017 2,000,000
2,200,000
PDP NCA

November 1, 2020 2,500,000 2,500,000

December 31, 2020 2,200,000 2,200,000

December 31, 2021 2,000,000 2,200,000

2. B. 2,200,000

PDP NCA

November 1, 2020 2,500,000 2,500,000

December 31, 2020 2,200,000 2,200,000

December 31, 2021 2,000,000 2,200,000

3. B. 200,000

(2,000,000 – 2,200,000) = (200,000)

4. A. 10%

Shares to be issued as dividend (P2,400,000/P60) 40,000

Outstanding Shares (500,000-100,000) 400,000

Percentage of Stock Dividend (40,000/400,000) 10%

5. B. 7,600,000

Preference Share Capital, P100 par 2,300,000

Ordinary Share Capital, P10 par 5,250,000

Subscribed Ordinary Share Capital 50,000

Legal Capital 7,600,000

6. C. 23,000,000

Ordinary share capital – 150,000 shares 18,000,000

 Preference share capital – 50,000 shares x 60 3,000,000

Subscribed preference share capital – 20,000 x 100 2,000,000

Total contributed capital 23,000,000

7. A. 1,125,000

8. B. 525,000

To record the issuance of preference shares:

Cash (15,000 x 110) 1,650,000

Preference share- capital 1,500,000

Share premium- preference 150,000

To record the conversion of preference shares to ordinary shares:

Preference share- capital 1,500,000

Share premium- preference 150,000

Ordinary share capital (45,000 x 25) 1,125,000

Share premium- Ordinary 525,000

9. D. 500,000

Increase in share capital (5,100,000 – 5,000,000) 100,000

Increase in share premium (2,900,000 – 2,500,000) 400,000

Stock Dividend 500,000

10. A. 5,250,000

Retained earnings- December 31, 2020 5,000,000

Net Income for 2021 1,500,000

Cash Dividend (750,000)

Share Dividend (500,000)

Retained Earnings - December 31, 2021 5,250,000