Deloy, Jenivieve O.

BSA601
04 QUIZ 1

CASE 1 1) Ordinary Share Issued

Authorized Ordinary Shares at P10 Stated Value P 4,800,000

Unissued Ordinary Share - 2,600,000
Total Ordinary Share Issued P 2,200,000

2) Preference Share Issued

Authorized Preference Shares at P50 Par Value P 3,200,000

Unissued Preference Share - 600,000
Total Preference Share Issued P 2,600,000

3) Share Premium

Share Premium on PS P 600,000

Share Premium on OS 1,200,000
Share Premium Conversion Option - BP 160,000
Donated Capital 160,000
Share Premium Conversion Option - BP 240,000
OS Options Outstanding 100,000
OS Warrants Outstanding 140,000
Total Share Premium P 2,600,000

4) Contributed Capital

OS Issued P 2,200,000
PS Issued 2,600,000
Subscribed OS 800,000
Subscribed PS 240,000
Total Share Premium 2,600,000
Total Contributed Capital P 8,440,000

5) Legal Capital

OS Issued P 2,200,000
PS Issued 2,600,000
Subscribed OS 800,000
Subscribed PS 240,000
Total Legal Capital P 5,840,000

6) Shareholder Equity
 Total OS Issued P 2,200,000
Total PS Issued 2,600,000
Total Share Premium 2,600,000
Subscribed OS 800,000
Subscribed PS 240,000
Revaluation Surplus 520,000
Unrealized Increase in Value of FVOCI Securities 40,000
Reserve for Bond Sinking Fund 1,280,000
Accumulated Profits - Unappropriated 2,000,000
Treasury Sharess - OS (10,000 sh) - 300,000
Total Shareholder Equity P 11,980,000

Case 2 a) Prepare Journal Entries

20X1
Feb-01 Treasury Shares - OS (45,000 x P33) P 1,485,000
Cash
To record the OS aquired by the company

Aug-30 Preference Share ( 15,000 sh x 40) 600,000

Ordinary Share
Share Premium - OS
To record the conversion of PF to OS

Dec-12 Cash (30,000 x 33 x 60%) 594,000

OS Subscription Receivable (990,000 - 594,000) 396,000
OS Subscribed (30,000 x 5)
Share Pemium - OS (30,000 x 28)
To record the subcription of OS, balance due on April 1 20x2

Dec-31 Income Summary 1,890,000

Retained Earnngs

20X2
Feb-01 Cash (25,500 x P33 x 40%) 336,600
Subscription Receivable

Subscribed OS 127,500
Ordinary Share

Subscribed OS (4,500 x 5) 22,500

Share Premim Os (4,500 x 28) 126,000
Subscription Receivale (4,500 x 33 x 40%)
Share Premium - Forfeiture of Share
 Apr-28 Cash (30,000 sh x P50) 1,500,000
Treasury Share (30,000 x 33)
Share Premium - OS

May-19 Retained Earnings 154,200

Preference Share

Total OS issued (360,000 + 25,000) P 385,500

Divided by: OS 100
Total PS 3,855
Multiplied by Market Value 40
Total Preference Share Capital P 154,200

Oct-31 Retained Earnings 192,750

Cash

Total OS Issued and Outstanding, 10-1,20X2 P 385,500

Cash Dividends Per Share 0.5
Total Cash Dividends Distributed to OS P 192,750

Retained Earnings 122,138

Cash

Total PS Issued as of 4-30, 20X2 P 45,000

Add: Concerted OS to PS 3,855
Total PS Issued as of 10-31, 20X2 48,855
Cash Dividend per share (40 x 12.5%) / 2 2.5
Total Cash Dividends Distributed to PS P 122,138

Dec-31 Income Summary 2,760,000

Retained Earnings

Case 3 1) What amount of compensation expense should be recognized in Year 1?

Total Employees 100

Less: Expected to leave in 3 years 10%
Employees Entitled for Share Options 90
Multiplied by: Share Opt-per Employees 10
Total Share Options Outstanding 900
Multiplied by: Fair value 30
Total Compensayion / Share option Outstanding 27000
Years 1/3
Compensation Expense for Year 1 ₱ 9,000
2) What amount of compensation expense should be recognized in Year 2?

Total Employees 100

Less: Expected to leave in 3 years 30%
Employees Entitled for Share Options 70
Multiplied by: Share Opt-per Employees 10
Total Share Options Outstanding 700
Multiplied by: Fair value 30
Total Compensayion / Share option Outstanding 21,000
Multiplied by Years 2/3
Cumulative Compensation Expense 14,000
Less: Compensation Expense for Year 1 9,000
Compensation Expense for Year 2 ₱ 5,000

3) Prepare the entry to record compensation expense for year 1 and year 2.

Year 1 Compensation Expense P 9,000

Share Option Outstanding

Year 2 Compensation Expense 5,000

Share Option Outstanding
 b) Date Preference Share Ordinary Share Share Premium
20X1 Jan-01 2,400,000 1,800,000 9,000,000
Feb-01
Apr-30
1,485,000 Aug-30 - 600,000 75,000 525,000
Oct-31
Dec-12 840,000
Dec-31
75,000 Total ₱ 1,800,000 ₱ 1,875,000 ₱ 10,365,000
525,000 20X2
Feb-02 127,500 - 36,900
Apr-28 510,000
Apr-30
May-10 154,200
150,000 Oct-31
840,000 Dec-31
Total Balance ₱ 1,954,200 ₱ 2,002,500 ₱ 10,838,100

1,890,000 1. Share Premium on December 31, 20X1 ₱ 10,365,000

2. Share Premium on December 31, 20X2 ₱ 10,838,100
3. R/E before appropriation, 20X1 ₱ 14,805,000
4. R/E before appropriation, 20X2 ₱ 16,790,662
336,600 5. Preference Share, 20X2 ₱ 1,954,200
6. Ordinary Share, 20X2 ₱ 2,002,500

127,500

59,400
89,100
 990,000
510,000

154,200

192,750

122,138

2,760,000
9,000

5000
 Subscribed Share Retained Earnings Treasury Shares
13,500,000
1,485,000
- 307,500

- 277,500
150,000
1,890,000
₱ 150,000 ₱ 14,805,000 ₱ 1,485,000

- 150,000 - 990,000
- 305,250
- 154,200
- 314,888
2,760,000
₱ - ₱ 16,790,662 ₱ 495,000