EASY ROUND:

E-1: (1 point)
It is an artificial being created by operation of law, having the right of succession and the powers, attributes,
and properties expressly authorized by law or incidental to its existence
a. Corporation b. Partnership c. Sole proprietorship d. Cooperatives

E-2: (2 points)
A corporation has ordinary shares with a P10 par value. 10,000 shares of this stock are issued for P13 each.
Which of the following will appear in the journal entry to record this transaction?
a. Dr. Share capital 130,000
b. Cr. Share capital 100,000
c. Dr. Share capital 100,000
d. Cr. Share capital 130,000

E-3: (2 points)
When MinMin incorporated in 2020, it was authorized to issue 1,000,000 shares of common stock. It
immediately issued 50,000 shares. In 2021, it issued an additional 20,000 shares. In 2023, it repurchased 5,000
shares with the intent of reissuing them. On the December 31, 2023 Statement of Financial Position, MinMin
Corporation would show:
a. 50,000 shares issued and 45,000 shares outstanding
b. 70,000 shares issued and 65,000 shares outstanding
c. 70,000 shares issued and 70,000 shares outstanding
d. 1,000,000 shares issued and outstanding

E-4: (2 points)
Affable Corp. issued 10,000 shares of its P1 par value ordinary shares for a building. The building has a fair
value of P500,000. On this date, Affable’s ordinary shares have a fair value of P45 per share. The entry to
record this transaction would include:
a. Dr. Share premium 490,000 c. Cr. Share premium 440,000
b. Dr. Share premium 440,000 d. Cr. Share premium 490,000

E-5: (2 points)
On January 1, a corporation has 200,000 shares outstanding with P20 par value each share. On February 2,
shareholders donated 5,000 of the entity’s own shares to the corporation. On March 24, the corporation sold
these donated shares at P50 per share. The journal entry on March 24 will include:
a. Cr. Share Capital 250,000
b. Cr. Donated Capital 100,000
c. Cr. Donated Capital 250,000
d. Cr. Share Capital 100,000

E-6: (1 point)
An advantage of a corporation is:
a. Ease of formation b. Limited liability c. Regulation d. Taxation

E-7: (1 point)
When a corporation issues new ordinary shares for cash, which of the following will increase?
I. Liabilities
II. Assets
III. Shareholders’ Equity
a. III only b. I and II only c. II and III only d. I, II and III
E-8: (1 point)
The cost of organizing a corporation should be (organization costs)
a. Expensed in the year of organization c. Reported as an asset
b. Deduction from share capital d. None of the choices

E-9: (1 point)
The maximum number of shares of stock that the government gives a corporation permission to issue is called
the:
a. Granted shares b. Authorized shares c. Issued shares d. Outstanding shares

E-10: (2 points)
On December 10, AAA Co. declared a 5-for-2 share split up on its ordinary share capital when the market
value was P60 per share. Prior to the split, AAA had 200,000 shares of P15 par value share capital issued,
with 20,000 of these in the treasury. How many shares are outstanding after the split?
a. 500,000 b. 450,000 c. 480,000 d. 550,000

AVERAGE ROUNDS:
A-1: (2 points)
Which of the following is/are not affected by a declaration of share dividends?
I. Shareholders’ equity
II. Assets
III. Liabilities
a. I only b. I and II only c. III only d. I, II and III

A-2: (4 points)
If a corporation reissued at P200 per share 100 shares of treasury stock that it had previously acquired for
P280 per share, and the Share Premium – Treasury account had a balance of P5,000, the entry to record this
transaction would include:
a. Cr. Share premium – Treasury 5,000 c. Dr. Share premium – Treasury 3,000
b. Dr. Retained earnings 3,000 d. Cr. Retained earnings 5,000

A-3: (4 points)
The Shareholders’ Equity section of BBB Corp. revealed the following on December 31, 2023:
Preference share capital, P100 par value P 230,000
Preference share premium 80,500
Subscribed preference share capital 15,000
Ordinary share capital, P15 stated value 525,000
Ordinary share premium 275,000
Subscribed ordinary share capital 5,000
Retained earnings 400,000
Subscription receivable – preference 40,000
Subscription receivable – ordinary 70,000

§ The subscription receivable – preference is expected to be collected on April 27, 2024

§ The subscription receivable – ordinary is expected to be collected on October 10, 2026

Required: Compute the Total Legal Capital of BBB Corp. on December 31, 2023
a. 1,130,500 b. 1,050,000 c. 775,000 d. 855,500
A-4: (4 points)
A partial snip of the Shareholders’ Equity section of a corporation on December 31, 2022 includes the
following balances:
10% Preference share capital, 1,000 shares issued, P100 par P 100,000
Preference share premium 30,000
Retained earnings 350,000
On March 1, 2023, the corporation decided to repurchase and immediately retired 400 of the preference shares
at P110 per share. These shares were originally issued at P105 each. The entry to record the retirement will
include:
a. Dr. Preference share premium 12,000 c. Dr. Retained earnings 2,000
b. Cr. Preference share premium 8,000 d. Cr. Retained earnings 2,000

~ end of first half of average round ~

A-5: (2 points)
Which of the following statements about treasury stock is/are correct?
I. Treasury stock does not receive dividends
II. Treasury stock is not included in the earnings per share calculation
III. Treasury stock are unauthorized stock
IV. Treasury stock are recorded at cost
a. I, II and IV b. I, II and III c. II, III and IV d. I, II, III and IV

A-6: (2 points)
Preference shares have preference over ordinary shares relative to:
a. Dividends and voting rights c. Voting rights and assets at liquidation
b. Dividends and assets at liquidation d. Dividends and maturity date

A-7: (4 points)
MinMin Company reported the following accounts as of December 31, 2023:
Preference share capital, 12% cumulative and fully
participating P100 par, authorized 20,000 shares, issued
15,000 shares of which 1,000 shares are in the treasury and
the last dividend paid was in 2018 P 1,500,000
Treasury preference shares, at cost 110,000
Subscribed preference share capital 200,000
Subscription receivable – preference 130,000
Ordinary share capital, par value P100, authorized 50,000
shares, issued 30,000 shares of which 1,000 shares are
reacquired 3,000,000
Treasury ordinary shares, at cost 70,000
Subscribed ordinary share capital 500,000
Subscription receivable – ordinary 200,000
Share premium 300,000
Retained earnings unappropriated 968,000
Retained earnings appropriated 680,000
Share dividends payable – ordinary, 500 shares 50,000
Cash dividends payable 75,000

§ The Subscription receivable – preference is expected to be collected on July 16, 2024

§ The Subscription receivable – ordinary is expected to be collected on April 27, 2025

Required: Compute the Shareholders’ Equity to be reported in the December 31, 2023 Statement of Financial
Position
a. 7,018,000 b. 6,768,000 c. 6,818,000 d. 6,893,000
A-8: (4 points)
Mine Co., a newly formed corporation, had the following share capital transactions during the year:
§ Ordinary shares, no par, P10 stated value, 5,000 shares issued at P150 per share
§ Preference shares, P100 par value, 1,500 shares issued at P250 per share

Mine’s year-end Statement of Financial Position should report:

Ordinary Share Capital Preference Share Capital Total Share Premium
a. P50,000 P150,000 P925,000
b. P50,000 P375,000 P700,000
c. P750,000 P370,000 0
d. P750,000 P150,000 P225,000

DIFFICULT ROUNDS:
D-1: (6 points)
The following selected accounts were taken from the December 31, 2023 trial balance of DDD Inc.:
Subscribed ordinary shares P 1,250,000
Treasury shares, 600 shares, at cost 90,000
Unissued ordinary shares 6,000,000
Share premium 180,000
Appropriation for plant expansion 500,000
Retained earnings 1,200,000
Authorized ordinary shares – 100,000 shares 10,000,000
Subscriptions receivable 320,000

The minutes of meetings of the board of directors reveal that on December 5, 2023, the board declared a 10%
cash dividend payable to shareholders and subscribers of record on December 20, 2023. The dividend checks
are to be distributed on January 10, 2024. What is the amount of dividend payable to be recorded?

D-2: (6 points)
MinMin Co. reported the following shareholders’ equity on December 31, 2023:
Preference share capital, 12% cumulative and fully participating
P100 par, authorized 20,000 shares, issued 15,000 shares of
which 1,000 shares are in the treasury and the last dividend was
in 2020. Preference shares have a liquidation value of P110 P 1,500,000
Treasury preference shares, at cost 110,000
Subscribed preference share capital 200,000
Subscription receivable – preference 130,000
Ordinary share capital, par value P100, authorized 50,000 shares,
issued 30,000 shares of which 1,000 shares are reacquired 3,000,000
Treasury ordinary shares, at cost 70,000
Subscribed ordinary share capital 500,000
Subscription receivable – ordinary 200,000
Share premium 300,000
Retained earnings unappropriated 968,000
Retained earnings appropriated 680,000

Required: Compute the (1) Book value per preference share and (2) Book value per ordinary share
D-3: (6 points)
The following balances appear in EEE Corp.’s December 31, 2019 Shareholders’ Equity Section:
Ordinary share capital, 100,000 issued shares, P30 par
value per share, originally issued at P50 per share P 3,000,000
Ordinary share premium 2,000,000
Retained earnings 750,000
During 2020, EEE declared a 3:1 share split. Thereafter, 15,000 shares were reacquired as treasury shares for
P15 per share. On December 31, 2020, EEE accepted a subscription for 5,000 ordinary shares at P20 per share
payable within 90 days. The Income Summary account at the end of the year had a debit balance of P123,000.
No dividends were declared. What is the total Shareholders’ Equity at the end of 2020?

D-4: (6 points)
At the beginning of the current year, MinMin Incorporated issued 10,000 ordinary shares with P20 par value
and 20,000 preference shares with P15 par value for a total of P800,000 cash. On this date, one ordinary shares
was selling for P36 and one preference share was selling for P27. Provide one compound journal entry to
record this transaction

D-5: (6 points)
FFF Co. was incorporated on June 1, 2020 with an authorized 250,000 shares of no-par ordinary share capital,
stated value P15 and 10,000 shares of 10% preference share capital, par value P50. Transactions affecting
company’s share capital as of June 30, 2020 were as follows:
June 1 Issued 50,000 ordinary shares for cash at P15 per share
5 Issued 50,000 ordinary shares in exchange for Land with fair value of P900,000
15 Received subscriptions for 100,000 ordinary shares at P30 per share and for
5,000 preference shares at P55 per share
25 Received full payment for subscriptions received on June 15 and the
corresponding stock were issued
30 The Income Summary account has a credit balance of P650,000

Required: Compute the Shareholders’ Equity to be presented in the June 30, 2020 Statement of Financial
Position