Professional Documents
Culture Documents
Supporting Computation PDF
Supporting Computation PDF
1 - Conviction Corporation
Question Nos. 1, 3 to 5 - B
Authorized common stock 4,000,000
Unissued common stock (800,000)
Common stock issued 3,200,000 1
Subscribed common stock 480,000
Subscriptions receivable (120,000) 360,000
Additional paid-in capital
Donated capital 800,000
Gain on sale of treasury stock 80,000
Premium on capital stock 320,000
Stock warrants outstanding 200,000 1,400,000
Retained earnings
Appropriated for sinking fund 400,000
Appropriated for treasury stock 144,000
Total appropriated retained earnings 544,000 3
Unappropriated (P720,000 - P144,000) 576,000 1,120,000
Revaluation surplus 800,000
Total 6,880,000
Less : Treasury stock (144,000)
Net unrealized loss on AFS (96,000) (240,000)
Total stockholders equity 6,640,000 5
Question No. 2 - B
Common stock issued 3,200,000
Subscribed common stock 480,000
Legal capital 3,680,000
AP-5801
PROBLEM NO. 2 - Determination, Inc.
2005
12.31.04 Transactions 12.31.05
Requirement no. 1
01/02/05 Capital stock [50,000 shares (P120-P100)] 1,000,000
Additional paid-in capital 1,000,000
Requirement no. 2
Capital stock (P5,995,000-P1,000,000+P550,000-P545,000) 5,000,000 (1) C
Stock dividends distributable 475,000
APIC (P1,000,000+P12,500+P142,500) 1,155,000 (2) C
Retained earnings-appropriated 275,000
Retained earnings (P3,742,500-P287,500-P72,500-P275,000) 3,107,500 (3) C
Total 10,012,500
Treasury stock (P550,000-P275,000) (275,000) (4) C
Total stockholders' equity 9,737,500 (5) C
PROBLEM NO. 5 - Endurance Company
Requirement no. 1
a Fire loss 5,250
Retained earnings 5,250
b Goodwill write off 52,500
Retained earnings 52,500
d Loss on sale of equipment 48,300
Retained earnings 48,300
g Retained earnings 129,500
APIC-excess of par 129,500
h APIC-excess of par 10,000
Retained earnings 10,000
i Retained earnings 8,470
APIC from forfeited subscriptions 8,470
j Retained earnings 25,900
APIC from retirement of preferred stock 25,900
k Retained earnings 15,050
Gain on early retirement of bonds 15,050
l Retained earnings 10,500
Gain on life insurance settlement 10,500
q Retained earnings 40,000
Donated capital 40,000
r Retained earnings 250,000
Revaluation increment in property 250,000
Requirement no. 2
Unadjusted retained earnings balance 559,320
a 5,250
b 52,500
d 48,300
g (129,500)
h 10,000
i (8,470)
j (25,900)
k (15,050)
l (10,500)
q (40,000)
r (250,000)
Correct amount of RE before net income(loss) 195,950
OR
Jan. 1 Balance 726,400
c Stock dividend (140,000)
e Officers’ compensation related to income
of prior periods – accrual overlooked (325,500)
f Loss on retirement of preferred shares
at more than issue price (70,000)
m Correction of prior-period error 50,050
n Effect of change in accounting principle
from FIFO to weighted average 100,000
o Dividends payable (25,000)
p Loss on sale of treasury stock (20,000)
s Appropriated for property acquisition (100,000)
Correct amount of RE before net income(loss) 195,950
PROBLEM NO. 6 - Guts Company
Requirement No. 1
Capital stock
Preferred stock 400,000
Common stock 800,000 1,200,000
APIC
Premium on preferred stock 150,000
Premium on common stock 165,000 315,000
Retained earnings
Retained earnings, appropiated - bond retirement 320,000
Retained earnings, unappropiated 458,600 778,600
Total 2,293,600
Less treasury stock, at cost 84,000
Stockholders' equity 2,209,600
Requirement No. 2
Excess
over par Preferred Common
Balances 1,069,600 * 340,000 ** 800,000
Preferred dividend (P340,000 x 6%) (20,400) 20,400
Liquidation premium (3,400 x P15) (51,000) 51,000
Balance to common 998,200 998,200
Total 411,400 1,798,200
Divide by outstanding shares 3,400 8,000
Book value per share 121.00 224.78
Requirement No. 3
Excess
over par Preferred Common
Balances 1,069,600 * 340,000 ** 800,000
Preferred dividend (P340,000 x 6%) (20,400) 20,400
Liquidation premium (3,400 x P15) (51,000) 51,000
Common dividend (P800,000 x 6%) (48,000) 48,000
Balance for participation 950,200
Preferred (340/1,140 x P950,200) 283,393
Common (800/1,140 x P950,200) 666,807
Total 694,793 1,514,807
Divide by outstanding shares 3,400 8,000
Book value per share 204.35 189.35
Page 1 of 1
PROBLEM NO. 7 - Courage Company
PROBLEM NO. 8
1) A 6) C
2) A 7) D
3) D 8) A
4) B 9) D
5) C 10) A