ACC 109 HANDOUTS

Delinquent Subscription

1. Who is the highest bidder?

2. Account for the delinquency if (a) there is are bidders and (b) no bidders

Callable Preference Shares

Requirement:
(1) Provide Journal entries

Redeemable Preference Shares

Requirement
(1) Provide Journal entries

Redeemable Preference Shares

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Requirement
(1) Provide journal entries

Convertible preference shares

Total Contributed Capital

Bronze Company provided the following information at year-end:
Share capital 5,000,000
Subscribed share capital 3,000,000
Subscription receivable 2,000,000
Share premium 1,500,000
Cumulative translation adjustment- debit 500,000
Treasury shares, at cost 700,000
Retained earnings 1,000,000
Cumulative unrealized gain on futures contract
designated as cash flow hedge 600,000
What is the contributed capital at year-end?

Issued and Outstanding

Beck Company issued 200,000 ordinary shares when it began operations in 2012 and issued an additional 100,000
ordinary shares in 2013. The entity also issued preference shares convertible to 100,000 ordinary shares. In 2014,
the entity purchased 75,000 ordinary shares and held as treasury. On December 31, 2014, how many ordinary
shares were outstanding?

Lump-sum issuance
At the beginning of the current year, Cove Company, a closely-held entity, issued 6% bonds with a maturity value
of P6,000,000, together with 10,000 ordinary shares of P50 par value, for a combined cash amount of PI 1,000,000.
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If the bonds were issued separately, they would have sold for P4,000,000 on an 8% yield to maturity basis. What
amount should be reported for share premium on the issuance of the ordinary shares?

Donated Shares
During the current year, Line Company received a donation of 2,000 shares with P50 par value from a shareholder.
On that date, the share market value was P350. The shares were originally issued for P250 per share. What is the
decrease in shareholders' equity as a result of the donation?

Treasury Shares

TS - Case 1

TS – Case 2

TS – Case 3

Treasury Shares

(1) Provide the journal entry for the reissuance

Retirement of TS

If 1,000 shares with par value of P100 are held as treasury at cost of 80,000, and subsequently retired, the journal
entry is:

Retirement of TS

Recapitalization
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Recapitalization

Recapitalization
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Cash Dividend – Share Split

Long Company had 10,000 shares issued and outstanding on January 1,2013. On March 15, the entity declared a
2 for 1 share split when the fair value of share was P80. On December 15, the entity declared a P5 per share cash
dividend. What amount should be reported as dividends?

Issued and Outstanding

Rudd Company had 700,000 ordinary shares authorized and 300,000 shares outstanding on January 1, 2014.
January 31 Declared 10% stock dividend
June 30 Purchased 100,000 shares
August 1 Reissued 50,000 shares
November 30 Declared 2-for-l share split
On December 31, 2014, how many ordinary shares are outstanding?

Preference Shares issued with share warrants

(1) Allocate the issue price to the preference share and the warrant
(2) Provide journal entries
(3) If subsequently, all 20,000 warrants are exercised requirement the issuance of 10,000 shares at 60 per share,
the journal entry is?
(4) If only the preference share has a known market value of P120 and the warrant has no known market value,
how is the sale price of 3,250,000 allocated?
(5) Provide journal entry for 4.

Preference shares issued with share warrants

(1) Allocate the issue price to the preference share and the warrant
(2) Provide journal entries