SHE Problems Robles Valix Answers

Book: The Intermediate Accounting 2021 Edition Volume 3
Author: Nenita S. Robles & Patricia M. Empleo

Problem: Problem 2-3 (Blazing Red Corporation)
Topic: SHE + Subscription + Treasury Shares + Delinquent Shares
Required: Total Shareholders' Equity of Blazing Red Corporation at December 31, 2022.
Ordinary Share Capital (30,000 x 10) + (10,000 x 10) 400,000

Share Premium - Ordinary (380,000 - 300,000) + (10,000 x 6) 140,000
Preference Share Capital (12,000 x 100) 1,200,000
Share Premium - Preference (1,500,000 - 1,200,000) 300,000
Retained Earnings 350,000
Treasury Shares (1,000 x 18) -18,000
Total Shareholders' Equity, Dec. 31, 2022 2,372,000
Problem: Problem 2-4 (Millenium Company)
Topic: SHE + Treasury Shares (Acquired, Sold, Retired)
Required: (a) Prepare the entries
1 Treasury Shares (10,000 x 14) 140,000

Cash 140,000
To record the reacquisition of 10,000 ordinary shares
2 Cash (4,000 x 15) 60,000

Treasury Shares (4,000 x 14) 56,000
Share Premium - Treasury (4,000 x 1) 4,000
To record the selling of 4,000 treasury shares
3 Cash (5,000 x 13) 65,000

Share Premium - Treasury (4,000 x 1) 4,000
Retained Earnings (1,000 x 1) 1,000
To record the selling of 5,000 treasury shares
4 Ordinary Share Capital (1,000 x 10) 10,000

Share Premium - Ordinary (1,000 x 3) 3,000
To record the retirement of treasury shares
(b) Total Shareholders' Equity at December 31, 2022 assuming the profit of P280,000 and cash dividends declared of P200,000
Ordinary Share Capital (1,000,000 - 10,000) 990,000

Share Premium - Ordinary (300,000 - 3,000) 297,000
Net Income 280,000
Retained Earnings (900,000 - 2,000) 898,000
Dividends Declared -200,000
Total Shareholders' Equity, Dec. 31, 2022 2,265,000
Problem: Problem 2-5 (Consuelo Enterprises, Inc.)
Topic: Retirement of Preference Shares
Required: Journalize the retirement of 4,000 preference shares
Retirement Price is P21 per share

Preference Share Capital (4,000 x 20) 80,000
Share Premium - Preference Share (4,000 x 1.6) 6,400
Cash (4,000 x 21) 84,000
Share Premium - Retirement 2,400
Retirement Price is P26 per share

Cash (4,000 x 26) 104,000
Problem: Problem 2-6 (Concepcion Enterprises, Inc.)
Topic: Convertible Preference Shares
Required: (a) Journalize conversion of 10,000 preference shares on a Share for Share Basis

Ordinary Share Capital (10,000 x 30) 300,000
(a) Journalize conversion of 10,000 preference shares (two preference shares convertible into one ordinary shares)

Ordinary Share Capital (10,000/2 x 30) 150,000
Share Premium - Ordinary Share 66,000
Problem: Problem 2-7 (Red Stone Company)
Topic: Share Dividends (Bonus) + Share Split
Required: (a) Entries to record 10% bonus issue is declared and issued
Bonus = 100,000 shares x 10% = 10,000 shares

Share Dividends Distributable (10,000 x 10) 100,000
Share Premium 100,000
Share Dividends Distributable 100,000

Ordinary Share Capital 100,000
(b) Entries to record 30% bonus issue is declared and issued

Bonus = 100,000 shares x 30% = 30,000 shares

Share Dividends Distributable (30,000 x 10) 300,000
Share Dividends Distributable 300,000

Ordinary Share Capital 300,000
(c) A 2-for-1 share split is declared and issued
Effected a 2-for-1 share split reducing the par value to P5 and increasing the number
of shares to 200,000 shares
Book: Intermediate Accounting 2020 Edition Volume 2
Author: Conrado T. Valix, Jose F. Peralta, & Christian Aris M. Valix
Problem: Problem 21-1 (Aroma Company)
Topic: Treasury Shares (Reissue & Retirement)
Required: (1) Prepare journal entries

Cash 800,000
To record reacquisition of 5,000 shares
Cash 1,000,000
Treasury Shares 800,000
Share Premium - Treasury 200,000
To record reissuance of treasury shares
Cash 700,000
Treasury Shares 800,000
(2) Retirement of Treasury Shares
Ordinary Share Capital (5,000 x 100) 500,000

Share Premium (5,000 x 4) 20,000
Problem: Problem 21-2 (Alegro Company)
Topic: Treasury Shares (reissue)
Required: (1) Prepare journal entries - The share has a P15 par value.
Treasury Shares (50,000 x 20) 1,000,000

Cash 1,000,000
To record reacquisitions of shares
Cash (50,000 x 25) 1,250,000

(2) Prepare journal entries - The share has no par but with stated value of P20

Cash 1,000,000
To record reacquisitions of shares
Cash (50,000 x 25) 1,250,000

Problem: Problem 21-3 (Honda Company)
Topic: SHE + Treasury Shares + Donated Capital + Appropriated Retained Earnings
Required: (1) Prepare the journal entries
a Cash (30,000 x 140) 4,200,000

Preference Share Capital (30,000 x 100) 3,000,000
Share Premium - Preference 1,200,000
b Cash (100,000 x 55) 5,500,000

Ordinary Share Capital (100,000 x 50) 5,000,000
Share Premium - Ordinary 500,000
c Preference Share Capital (10,000 x 100) 1,000,000

Share Premium - Preference (10,000 x 40) 400,000
Cash (10,000 x 120) 1,200,000
d Treasury Shares (15,000 x 52) 780,000

Cash 780,000
e Cash (10,000 x 60) 600,000

f Treasury Shares (20,000 x 60) 1,200,000

Donated Capital - Ordinary 1,200,000
Cash (10,000 x 65) 650,000

Donated Capital - Ordinary 50,000
g Profit or Loss 3,000,000

Retained Earnings 3,000,000
h Retained Earnings 860,000

Appropriated Retained Earnings 860,000
(2) Total Shareholders' Equity
Ordinary Share Capital 5,000,000

Preference Share Capital 2,000,000
Share Premium - Preference 800,000
Donated Capital 1,250,000
Treasury Shares -860,000
Unappropriated Retained Earnings 2,140,000
Total Shareholders' Equity 11,970,000
Problem: Problem 21-4 (Divina Company)
Topic: Recapitalization (Par to No-Par, Share Split, Reduction of Par Value)
Required: Journal entries for the following cases
a Ordinary Share Capital 3,000,000

Ordinary Share Capital (20,000 x 2 x 50) 2,000,000
Share Premium 1,200,000
b Issued 100,000 new shares with par value of P30, as a result of 5-for-1 split
of 20,000 old shares with a par value of P150
c Ordinary Share Capital (20,000 x 50) 1,000,000

Share Premium - recapitalization 1,000,000
d Ordinary Share Capital 3,000,000

Ordinary Share Capital (20,000 x 4 x 50) 4,000,000
Problem: Problem 21-5 (Toyota Company)
Topic: Treasury Shares + Share Split + Donation
Required: a. Prepare journal entries to record the transactions
1 Cash (20,000 x 50) 1,000,000

Ordinary Share Capital 1,000,000
2 Treasury Shares - Ordinary (5,000 x 60) 300,000

Cash 300,000
3 Issued 140,000 new shares with par value of P25, as a result of 2-for-1 split
of 70,000 old shares with a par value of P50
4 Cash (3,000 x 40) 120,000

Treasury Share - Ordinary (3,000 x 30) 90,000
5 Fifteen thousand (15,000) ordinary shares of P25 par value were

received as donation from various shareholders.
Cash (10,000 x 40) 400,000

Donated Capital 400,000
6 Profit or Loss 500,000

7 Retained Earnings 210,000

b. Present the SHE
Preference Share Capital 500,000

Ordinary Share Capital (2,500,000 + 1,000,000) 3,500,000
Donated Capital 400,000
Share Premium - PS 200,000
Retained Earnings, unappropriated 2,290,000
Retained Earnings, appropriated 210,000
Treasury Shares -210,000
Total Shareholders' Equity 7,420,000

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Book: The Intermediate Accounting 2021 Edition Volume 3

Author: Nenita S. Robles & Patricia M. Empleo

Ordinary Share Capital (30,000 x 10) + (10,000 x 10) 400,000

Required: (a) Prepare the entries

1 Treasury Shares (10,000 x 14) 140,000

2 Cash (4,000 x 15) 60,000

3 Cash (5,000 x 13) 65,000

4 Ordinary Share Capital (1,000 x 10) 10,000

Ordinary Share Capital (1,000,000 - 10,000) 990,000

Required: Journalize the retirement of 4,000 preference shares

Retirement Price is P21 per share

Retirement Price is P26 per share

Preference Share Capital (10,000 x 20) 200,000

Preference Share Capital (10,000 x 20) 200,000

Retained Earnings (10,000 x 20) 200,000

Share Dividends Distributable 100,000

(b) Entries to record 30% bonus issue is declared and issued

Retained Earnings (30,000 x 30) 300,000

Share Dividends Distributable 300,000

(c) A 2-for-1 share split is declared and issued

Required: (1) Prepare journal entries

Treasury Shares (5,000 x 160) 800,000

(2) Retirement of Treasury Shares

Ordinary Share Capital (5,000 x 100) 500,000

Treasury Shares (50,000 x 20) 1,000,000

Cash (50,000 x 25) 1,250,000

Treasury Shares (50,000 x 20) 1,000,000

Cash (50,000 x 25) 1,250,000

Required: (1) Prepare the journal entries

a Cash (30,000 x 140) 4,200,000

b Cash (100,000 x 55) 5,500,000

c Preference Share Capital (10,000 x 100) 1,000,000

d Treasury Shares (15,000 x 52) 780,000

e Cash (10,000 x 60) 600,000

f Treasury Shares (20,000 x 60) 1,200,000

Cash (10,000 x 65) 650,000

g Profit or Loss 3,000,000

h Retained Earnings 860,000

(2) Total Shareholders' Equity

Ordinary Share Capital 5,000,000

Required: Journal entries for the following cases

a Ordinary Share Capital 3,000,000

c Ordinary Share Capital (20,000 x 50) 1,000,000

d Ordinary Share Capital 3,000,000

Required: a. Prepare journal entries to record the transactions

1 Cash (20,000 x 50) 1,000,000

2 Treasury Shares - Ordinary (5,000 x 60) 300,000

4 Cash (3,000 x 40) 120,000

5 Fifteen thousand (15,000) ordinary shares of P25 par value were

Cash (10,000 x 40) 400,000

6 Profit or Loss 500,000

7 Retained Earnings 210,000

b. Present the SHE

Preference Share Capital 500,000

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