Basic Accounting for Corporation
d.) total contributed capital (It includes the share capital (at par) plus subscribed share capital (at par) plus the share premium (the amount in excess of par value) less subscription receivable.)
What is the amount of cash and property received by the corporation from the stockholder or subscriber for shares of stock issued and subscribed. a.) cash dividend payable b.) additional paid in capital c.) subscribe share capital d.) contributed capital
A) Book Value per Share
What is the amount that would be paid on each share if the corporation is liquidated? A) Book Value per Share B) Earnings per Share C) Liquidation Value D) Gross profit Ratio
a. Retained Earnings (Retained Earnings is one of two major components of stockholder's equity together with Paid-in Capital)
What is the balance of accumulated yearly net income and losses less the dividend distribution, after income adjustments for prior period errors and changes in accounting policies are made? a. Retained Earnings b. Dividend Payable c. Free or unappropriated retained earnings d. Restricted or appropriated retained earnings
C) Liquidation Value (Typically, It is less than what could be received from selling assets in the ordinary course of business.)
What is the cash price or other consideration that can be received in a forced sale of assets such as the occurring when a firm is in the process of going out of business? A) Book Value per Share B) Earnings per Share C) Liquidation Value D) Gross profit Ratio
Cash Dividend payable ₱x,xxx ____________Cash ₱x,xxx (cash dividends decrease total assets and total shareholder's equity)
What is the entry in date of payment on cash dividends?
D.) Income Summary ₱XXX _________Retained Earnings ₱XXX
What is the journal entry if the net income is closed to retained earnings? A.) Retained Earnings ₱XXX _________Income Summary ₱XXX B.) Retained Earnings ₱XXX _________Dividend Payable ₱XXX C.) Income Summary ₱XXX _________Expenses ₱XXX D.) Income Summary ₱XXX _________Retained Earnings ₱XXX
A.) Retained Earnings ₱XXX _________Income Summary ₱XXX
What is the journal entry if the net loss is closed to retained earnings? A.) Retained Earnings ₱XXX _________Income Summary ₱XXX B.) Retained Earnings ₱XXX _________Dividend Payable ₱XXX C.) Income Summary ₱XXX _________Expenses ₱XXX D.) Income Summary ₱XXX _________Retained Earnings ₱XXX
B.) Retained Earnings ₱XXX _________Dividend Payable ₱XXX
What is the journal entry when dividends are declared? A.) Retained Earnings ₱XXX _________Income Summary ₱XXX B.) Retained Earnings ₱XXX _________Dividend Payable ₱XXX C.) Income Summary ₱XXX _________Expenses ₱XXX D.) Income Summary ₱XXX _________Retained Earnings ₱XXX
A) Retained earnings
Any corrections to income or expenses of prior periods should be made directly to A) Retained earnings B) Contributed Capital C) Subscribed Shares D) Stockholder's Equity
c. ₱1,500,000 ( Given 75,000x₱30-10)
Authorized Capital 100,000 shares of ₱20 par Ordinary Share Capital 75,000 shares issued @ ₱30 per share cash Profited ₱500,000 Distributed dividends ₱350,000 What is the balance of Ordinary Share Capital? a. ₱1,000,000 b. ₱1,350,000 c. ₱1,500,000 d. ₱500,000
b. 5,500(issued shares+subscribed shares-treasury shares)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How many shares are outstanding? a. 5,000 b. 5,500 c. 4,000 d. 3,750 e. None of these
c. 3,000 (₱600,000/₱200par)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How many shares are subscribed? a. 4,000 b. 4,500 c. 3,000 d. 3,750 e. None of these
d. 3,000 (subscribed shares subject of a subscription agreement that is paid or unpaid, stock certificates are not yet in the hands of the subscriber)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How many shares are unissued yet outstanding? a. 5,000 b. 5,500 c. 4,000 d. 3,000 e. None of these
c. 7,500 unISSUED (10,000-2500)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How many shares of stock are still unissued? (shares) a. 10,000 b. 9,500 c. 7,500 d. 8,000 e. None of these
b. 2,500 (₱500,000/₱200par)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How many shares of stock has been issued? (shares) a. 1,000 b. 2,500 c. 1,500 d. 1,750 e. None of these
c. ₱500,000 (given)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How much is the issued share capital? a. ₱25,000 b. ₱250,000 c. ₱500,000 d. ₱2,500 e. None of these
b. ₱500,000
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How much is the issued shared capital? a. ₱600,000 b. ₱500,000 c. ₱610,000 d. ₱100,000 e. None of these
d. ₱1,210,000(share capital+SUBSCRIBED share capital+share premium -subscription receivable)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How much is the total contributed capital or paid in capital? a. ₱1,000,000 b. ₱1,050,000 c. ₱1,500,000 d. ₱1,210,000 e. None of these
b. ₱1,210,000(Firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares.)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How much is the total shareholder's equity ? a. ₱1,000,000 b. ₱1,350,000 c. ₱1,310,000 d. ₱1,210,000
d. ₱200
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 What is the Par value for Share Capital? a. ₱300 b. ₱400 c. ₱500 d. ₱200 e. None of these
a. ₱1,100,000((capital contributed by shareholders comes from the sale of shares of stock or total share capital, share premium not included, what is only stated))
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 2,500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 (current asset) Share Premium (Additional paid in capital in excess of par value) ₱110,000 What is the legal capital? a. ₱1,100,000 b. ₱1,350,000 c. ₱1,500,000 d. ₱1,310,000
e. ₱2,000,000 (given)
Authorized Capital Stock (Authorized Share Capital) 10,000 shares, par ₱200 ₱2,000,000 Capital Stock (Share Capital) issued 500 ₱500,000 Subscribed Capital Stock (Subscribed Share Capital) ₱600,000 Subscription Receivable ₱100,000 Share Premium (Additional paid in capital in excess of par value) ₱110,000 How much is the authorized share capital? a. ₱1,000,000 b. ₱1,250,000 c. ₱1,500,000 d. ₱1,750,000 e. ₱2,000,000 f. None of these
C) legal capital (capital contributed by shareholders comes from the sale of shares of stock or total share capital, share premium not included, what is only stated)
For par value shares is that amount equal to the grouped number of all issued and subscribed shares multiplied by its par value, A) no-par stock B) stated value C) legal capital D) common stock E) treasury stock
De facto corporation
Is one so defectively created that its creation does not conform with corporation laws
C) Dividend in arrears (Dividends in arrears are reported in the financial statements in the footnotes.)
It does not constitute as a liability of the corporation since they are not a legal liability. Cumulative preferred shares should be paid on this before any excess can be paid to common shares A) Property Dividend Payable B) Dividend Payable C) Dividend in arrears D) Scrip Dividend
D) Corporation
It is an artificial being created by operation of law, having the rights of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. A) Eleemosynary Corporation B) Corporation Sole C) De jure Corporation D) Corporation
B) Eleemosynary Corporation
It is created for the purpose of charities, such as an orphanage. A) Public Corporation B) Eleemosynary Corporation C) Open Corporation D) Lay Corporation
B) Ecclesiastical Corporation
It is created to secure the public worship of God A) Eleemosynary Corporation B) Ecclesiastical Corporation C) de jure Corporation D) de facto Corporation
B) Convertible Preference shares (these shares has preemptive right)
It is issued by corporation which permits the stockholder at his option and within specified period, to transform shares currently held shares for ordinary share at a specified rate A) Callable Preference shares B) Convertible Preference shares C) Outstanding Shares D) No-par value shares
B) Preferred Stock (or Preference Shares in the absence of an agreement, are assumed to be non-cumulative and non-participating and these Preference shares should only be issued as par value shares)
It is required by law to have par value A) Founder's stock B) Preferred Stock C) Promotion Stock D) Watered stock
c) ownership
One of the advantages of the corporation form of business as opposed to a partnership form is the ease of transferring _____________. a) articles of incorporation b) stockholder's equity c) ownership d) profit
b. ₱2,470,000 2,550,000 less ( ₱24 at cost less ₱20 par value x 20,000)
Ordinary Shares, ₱20 par ₱8,000,000 Share Premium 2,550,000 Retained Earnings 1,275,000 All ordinary shares outstanding were issued for ₱26 a share. The Corporation reacquired 20,000 of its ordinary shares at ₱24 a share and retired them. What is the balance of the share premium? a. ₱2,430,000 b. ₱2,470,000 c. ₱2,510,000 d. ₱2,590,000
a. ₱355,500 (80,500+275,000)
Preference share, ₱100 par value ₱230,000 Preference share Premium 80,500 Ordinary Share, ₱15 par value 525,000 Ordinary share Premium 275,000 Ordinary share Subscribed 5,000 Retained Earnings 190,000 Notes Payable 400,000 Subscription receivable-Ordinary 40,000 How much is the Additional paid-in capital? a. ₱355,500 b. ₱360,500 c. ₱400,500 d. ₱800,500
a.₱760,000 (₱230,000+525,000+5,000) (It is the stated or par value issued rather legal paid in capital)
Preference share, ₱100 par value ₱230,000 Preference share Premium 80,500 Ordinary Share, ₱15 par value 525,000 Ordinary share Premium 275,000 Ordinary share Subscribed 5,000 Retained Earnings 190,000 Notes Payable 400,000 Subscription receivable-Ordinary 40,000 How much is the legal capital of the corporation? a. ₱760,000 b. ₱775,000 c. ₱1,115,000 d. ₱1,305,500
a. ₱1,305,500 (add all except payables and receivables)
Preference share, ₱100 par value ₱230,000 Preference share Premium 80,500 Ordinary Share, ₱15 par value 525,000 Ordinary share Premium 275,000 Ordinary share Subscribed 5,000 Retained Earnings 190,000 Notes Payable 400,000 Subscription receivable-Ordinary 40,000 How much is the total stockholder's equity? a. ₱1,305,500 b. ₱1,345,500 c. ₱1,704,500 d. ₱1,745,500
TRUE (The stock market utilize book value as one of the basis for evaluating whether a stock is undervalued or not)
T/F: Book value per share may be used as the initial bargaining price in negotiating the purchase of a corporation whose shares are not traded in the stock exchange.
TRUE
T/F: If Treasury shares are sold below cost, the deficiency shall be charged first to Additional Paid in Capital - Treasury Share account, if there is any account balance. If the amount of the Additional Paid in capital - Treasury share is not enough, then the balance should be charged to Retained Earnings.
TRUE
T/F: If retained earnings has a debit balance it is deficit. its normal balance is credit.
FALSE (dividends become liabilities only when the B.O.D. declares them)
T/F: If the board of directors does not declare the regular annual dividend on its common stock, the corporation's liabilities will include the omitted dividend.
TRUE
T/F: If the treasury stock is acquired for non-cash consideration, the cost is usually measured by the recorded amount of assets surrendered or given in exchange.
TRUE
T/F: In 30 days from the said specified date or the board of directors calls no payment, all stocks covered by the subscription shall become delinquent and shall be subject to auction.
TRUE
T/F: Incorporators are founders of the corporation; are signatories to the articles of Incorporation; must be at least five but not more than fifteen members; need to be natural persons; partnerships and corporations cannot be incorporators; need to own at least one share of stock
TRUE
T/F: Retained Earnings are not a cash fund waiting to be distributed as dividends. It is a stockholder's equity account representing claim on all assets not any particular assets but in general.
TRUE
T/F: Shareholders' equity is a firm's total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity represents the amount by which a company is financed through common and preferred shares.
TRUE
T/F: The corporation opens a delinquent account by closing/crediting the SUBSCRIPTION RECEIVABLE account / Debit to DUE FROM HIGHEST BIDDER account, Expenses related to the public auction are recoverable from the highest bidder.
TRUE
T/F: When the preferred share is reacquired for retirement, all share capital accounts and premium on share capital accounts relating to the specific shares are removed from the accounts. Any loss in the transactions is charged to Retained Earnings or any gain recorded as Share Premium - Retirement of Preference Shares.
TRUE
T/F: a buy back on treasury stocks improves many of the financial metrics: ROE (Return on Equity) and EPS (Earnings per Share). Both of these core metrics have denominator as number of shares and by reducing number of shares, you increase them. deffered revenue.
D) Subscribed Share Capital (debited upon issuance of share capital - ordinary or preferred which is credited)
That are in subject of subscription agreement that is paid but stock certificate is not yet in the hands of the subscriber not issued yet outstanding A) Callable Preference shares B) Convertible Preference shares C) Outstanding capital stock D) Subscribed Share Capital
A.) Free Retained Earnings or C.) Unappropriated Retained Earnings
That portion of retained earnings available for distribution of dividends A.) Free Retained Earnings B.) Restricted Earnings C.) Unappropriated Retained Earnings D.) Appropriated Retained Earnings
D.) Appropriated Retained Earnings or B.) Restricted Earnings
That portion of retained earnings available for dividend declaration because they are earmarked rather designated for a specific purpose A.) Free Retained Earnings B.) Restricted Earnings C.) Unappropriated Retained Earnings D.) Appropriated Retained Earnings
C) Share Premium
The account title used for the amount paid in excess of par or stated value A) Unissued Shares B) Par Value Shares C) Share Premium D)Shares in Escrow
B) Contributed Capital
The amount of cash and property received by the corporation from stockholders for the shares of stock sold. A) Federal Capital B) Contributed Capital C) Retained Earnings D) Treasury Stock
C) Stock and transfer book
The book where the names of stockholders, their stock acquisitions and disposals are recorded A) Chart of Accounts B) Subscription Book C) Stock and transfer book D) Stockholder's Ledger
Assets - Increase Liabilities - No Effect Shareholder's Equity - Increase
The effects of the basic shareholder's equity transactions *Issuance of Shares Assets, Increase or Decrease? Liabilities, Increase or Decrease? Shareholder's Equity, Increase or Decrease?
Assets - Decrease Liabilities - No Effect Shareholder's Equity - Decrease
The effects of the basic shareholder's equity transactions *Purchase of Treasury Stock Assets, Increase or Decrease? Liabilities, Increase or Decrease? Shareholder's Equity, Increase or Decrease?
Assets - Increase Liabilities - No Effect Shareholder's Equity - Increase
The effects of the basic shareholder's equity transactions *Reissuance of Treasury Stock Assets, Increase or Decrease? Liabilities, Increase or Decrease? Shareholder's Equity, Increase or Decrease?
B) Authorized Capital Stock
The maximum number of shares that a corporation may issue as stated in the articles of incorporation multiplied by par value A) Callable Preference shares B) Authorized Capital Stock C) Outstanding capital stock D) Legal Capital
C) Prior period errors (Credit entries increase retained earnings, Debit entries decreases them which is called a deficit)
What are errors discovered in the current period that are of such significance that the financial statements of one or more periods can no longer be considered to have been reliable at the date of their issue. A) fraudulent activity B) biased opinions C) Prior period errors D) estimation errors
1/1- 80,000 shares 3/31-82,400 shares 12/31-164,000 shares
1/1-Corporation Records Balances Ordinary Shares, ₱1 par ₱80,000 Share Premium 920,000 Retained Earnings 760,000 1/15-Board of directors declared a 3% share dividend; the stock's market price was ₱50 per share 11/4-The board of directors declared a 2-for-1 share split; the stock's market price was ₱90 per share. How many shares of stock were outstanding on Jan.1, Mar 31, and Dec. 31 assuming no other events related to shareholder's equity occurred?
1/1- 80,000 shares 3/31 - 82,400 shares 12/31 - 164,800 shares 1/15 Retained Earnings ₱80,000 ________Ordinary Shares-Dividend ₱80,000
1/1/16 - Corporation Balances Ordinary Shares, ₱1 par ₱80,000 Share Premium-Ordinary 920,000 Retained Earnings 760,000 1/15/16 - The board of directors declared a 100% share dividend; the stock's market price was ₱50 per share 11/4/16 - The board of directors declared a 2-for-1 split; the stock's market price was ₱90 per share. How many shares of stock were outstanding on Jan.1, Mar.31, and Dec. 31, 2016 and the entries for the two events
1/15 Retained Earnings ₱120,000 ________Ordinary Shares-Dividend ₱2,400 ________Share Premium-Ordinary 117,600 11/4 a 2-for-1 share split was declared for the common stockholders of record. The share split will result in the number of issued and outstanding shares of common shares increasing from 82,400 shares to 164,800 shares."
1/15-Corporation Records Balances Ordinary Shares, ₱1 par ₱80,000 Share Premium 920,000 Retained Earnings 760,000 1/15-Board of directors declared a 3% share dividend; the stock's market price was ₱50 per share 11/4-The board of directors declared a 2-for-1 share split; the stock's market price was ₱90 per share. What are the entries for these two events?
b. ₱702,000 (profit+total issued-total treasury shares)
1/2-Authorized capital 100,000 shares @ ₱10 1/7-Issued 40,000 shares @ ₱12 per share 12/2-Purchased 6,000 treasury shares at ₱13 per share Profit for the year ₱300,000. What is the amount of Shareholder's equity as of December 31,2015? a. ₱260,000 b. ₱702,000 c. ₱708,000 d. ₱720,000
1.100,000 shares x5= 500,000 shares ___________par10 /5= 2 ₱1,000,000___________ ₱1,000,000 * A share split will be described as "2:1," which is read "two-for-one," meaning you will receive an additional share so you end up with two shares instead of one. 2.100,000 shares /5= 20,000 shares ___________par10 x5= 50 ₱1,000,000___________ ₱1,000,000 *A reverse split will be shown as "1:2," read "one-for-two," meaning you will be re-issued a new certificate for half the original number of shares, and the old certificate will be canceled
100,000 shares of ₱10 par value issued and outstanding compute for 1. share split 5:1 2. reverse split 1:5
Preference Shares ₱40,000 Retained Earnings 80,000* _______Ordinary Shares ₱80,000 (o/s 8,000 shares x ₱10 o/s value = ₱80,000) *Debited to Retained Earnings if lower to Share Premium-PS
7% Preference Share capital, Authorized 4,000 shares Outstanding 2,000 shares @ ₱10 par Ordinary Share capital, Authorized 6,000 shares Outstanding 4,000 shares @ ₱10 par Retained Earnings ₱80,000 If all Convertible Shares are converted into 1:2 The Entries are:
LV ₱12 x 2,000 = ₱24,000 DIA 7% x 20,000 x 2 = 2,800 Current Dividend 7% x 20,000 = 1,400 Ps Shareholder's Equity = ₱28,200 BVPS ₱28,200 / 2,000 = ₱14.10 (Share premium Account not included but Subscriptions receivable not deducted)
7% Preference Share capital, Authorized 4,000 shares Outstanding 2,000 shares @ ₱10 par Ordinary Share capital, Authorized 6,000 shares Outstanding 4,000 shares @ ₱10 par Retained Earnings ₱80,000 BOD DECLARED ₱24,000 Liquidation Value ₱12 Dividends in arrears 2 years What is the Preference Book Value per share?
₱8(non-cumulative/ non-participating)
Based upon the following information, determine the dividend that will be paid per common share if there are 10,000 shares of preferred stock which are entitled to receive a ₱5 dividend, 50,000 shares of common stock, net income equal to 750,000 of which 40% is to be retained, and there are no dividends in arrears
₱107,250
Determine how much is needed for the following dividend payment based on the given information: 80,000 shares of common stock were issued and authorized, 8,500 shares have been repurchased, and a dividend of ₱1.50 has been declared on each common share.
Preference share(10,000 x ₱20) ₱200,000 Share Premium-P(10,000 x ₱1.50) ₱15,000 R Earnings (10,000 x ₱0.50 loss) ₱ 5,000 ____________Cash(10,000x₱22) ₱22,000
Preference shares, redeemable (10,000 shares outstanding ₱20 par value)-₱200,000 Share premium - Preferred (₱15,000/10,000 shares = ₱1.50 per share)-₱15,000 Retained Earnings-₱500,000 Assume that the preference share, redeemable, is reacquired for retirement at ₱22.00 per share, over par value and original price. The original price per share is ₱21.50 (₱200,000 + ₱15,000/10,000 shares) It is a loss of ₱0.50 per share. What is the journal entry?
BVPS ₱111,800/4,000 = ₱27.95 (Total Shareholder's Equity less Ps Shareholder's Equity equals Ordinary Shareholder's Equity divided by Ordinary Outstanding Shareholder's)
Ps Shareholder's Equity = ₱28,200 Total Shareholder's Equity = ₱140,000 What is the Ordinary Book Value per share or EPS?
Cash ₱129,000 Sub Receivable-P ₱ 44,000 Sub Receivable-O ₱ 42,000 _________ Subscribed SC-P ₱100,000 _________Subscribed SC-O 100,000 _________ SPremium - P 10,000 _________ SPremium - O 5,000
Received stock subscriptions from a,b, and c a for 1,000 preferred stocks with ₱100 par value @ ₱110 per share and b and c for 500 common stocks each, with ₱100 par value @ ₱105. Collected 60% of these subscriptions in cash. what are the journal entries?
Cash ₱1,000 Share Premium - TS ₱100 Retained Earnings 150 ____________Treasury Shares ₱1,250
Share capital, ₱10 par, 5,000 shares authorized, 2,000 shares issued ₱20,000 Share premium (₱1 per share) ₱2,000 Additional paid in capital - ts ₱100 Retained Earnings ₱6,000 100 shares with ₱10 par are reacquired at ₱12.50, the entry will be: Treasury Share ₱1,250 ____________Cash ₱1,250 When Treasury Shares were sold below cost at ₱10, the entry will be?
B) Unissued Shares
The number of shares of stock that remained unsold after deducting stock from the authorized capital stock A) Outstanding Shares B) Unissued Shares C) Convertible Preference shares D) Subscribed Shares
D) Stockholder's Equity
The residual amount after the claims of the creditors are subtracted from the total assets of the corporation. A) Retained earnings B) Contributed Capital C) Subscribed Shares D) Stockholder's Equity
A) Callable Preference shares
The stock issued by a corporation which may be retired at the option of the corporation after a specified date at an amount above par value, rather the company has an option to buy the share at a predetermined price and on or before a certain date. A) Callable Preference shares B) Convertible Preference shares C) Outstanding Shares D) No-par value shares
A) Outstanding Shares
The total shares of stock at the hands of stockholders plus total shares subscribed, whether fully or partially paid, as long as there is a binding subscription agreement. A) Outstanding Shares B) Callable Preference shares C) Convertible Preference shares D) Subscribed Shares
No-par value shares
These are shares without any money value appearing on the face of the stock certificate. The Corporation Code provides that no-par value shares may not be issued for less than 5 pesos per share.
C) Non-Cumulative Preference shares (No dividend declared for the year it is forfeited)
These share entitle the holders only to current year dividend, to the extent of the preference rate A) Callable Preference shares B) Cumulative Preference shares C) Non-Cumulative Preference shares D) Subscribed Share Capital
D) Non-Participating Preference shares (does not participate in another division of profit)
These shares entitle holders only to the stipulated preference rate of dividend but all excess remainder to ordinary A) Participating Preference shares B) Cumulative Preference shares C) Non-Cumulative Preference shares D) Non-Participating Preference shares
A) Participating Preference shares
These shares entitles to participate with the holders of ordinary shares pro-rata also at preference rate. The remainder based on outstanding monetary amount in ratios A) Participating Preference shares B) Cumulative Preference shares C) Non-Cumulative Preference shares D) Non-Participating Preference shares
B) Cumulative Preference shares (When the BOD does not declare dividends, the dividends of these shares accumulate)
This Preference Share feature entitles not only of current dividends, but also of dividends in arrears, before the ordinary shareholders are paid. A) Callable Preference shares B) Cumulative Preference shares C) Outstanding capital stock D) Subscribed Share Capital
a) Corporation aggregate (chartered, statutory and registered.)
This corporation is a separate legal entity formed by several individual persons. Having such an existence which is separate from the persons comprising it. a) Corporation aggregate b) Corporation sole c) Corporation De jure d) Corporation De facto
COST METHOD
What method in recording treasury stock transactions at the determined price spent regardless of the issue price but when retired based on par value
Common Stock / Ordinary Share
When a corporation issues only one class of stock it is called
D.)Retained Earnings ₱XXX Appropriated retained earnings - resolution ₱XXX
When the Board of Directors passes a resolution to appropriate the free retained earnings so it will not be available for dividend declaration but for corporation's expenses, what is the journal entry? A.) Appropriated retained earnings - resolution ₱XXX __________________Retained Earnings ₱XXX B.) Additional Paid in Capital ₱XXX Appropriated retained earnings - resolution ₱XXX C.) Additional Paid in Capital ₱XXX _________Retained Earnings ₱XXX D.)Retained Earnings ₱XXX Appropriated retained earnings - resolution ₱XXX
A.) Appropriated retained earnings - resolution ₱XXX __________________Retained Earnings ₱XXX
When the purpose of resolution is completed what is the reversing entry? A.) Appropriated retained earnings - resolution ₱XXX __________________Retained Earnings ₱XXX B.) Additional Paid in Capital ₱XXX Appropriated retained earnings - resolution ₱XXX C.) Additional Paid in Capital ₱XXX _________Retained Earnings ₱XXX D.)Retained Earnings ₱XXX Appropriated retained earnings - resolution ₱XXX
B) A CORPORATION AGGREGATE is composed of more than one member or stockholder, purpose is to do business, A corporation sole is composed by a single member and his successors of his office.
Which Statement is False A) The officers of a public corporation are appointed by the State or elected by the people. B) A corporation sole is composed of more than one member C) A close corporation is one which the stockholders or members are limited to a few persons such as members of the family D) A de jure corporation is one created of legal requirements.
C) A stockholder can sell his stocks WITHOUT CONSENT of the other stockholders. Must be duly recorded in the stock and transfer book of the corporation.
Which Statement is False? A) The Corporators of non-stock corporation are members B) A Subscriber is one who takes shares of stock under an agreement but not yet fully paid C) A stockholder can sell his stocks provided it is with the consent of the other stockholders D) An underwriter sells corporate shares to the public, and also buys corporate shares
TRUE
Which of the following are True: a.) The excess of the cost over reiisue price should be debited to share premium-treasury to the extent of its balance. b.) When no-par ordinary shares without a stated value is issued for cash, the Ordinary Shares account is credited for an amount equal to the cash proceeds. c.) Assets received from the shareholders as donations should be recorded at the fair market value of the items received, with credit going to share premium d.) Treasury Shares are shares that are issued but not outstanding.
All of them
Which of the following decreases retained earnings? a.) Reissuance of Treasury Stocks below cost b.) Loss on Retirement of funds c.) Dividend Declaration d.) Appropriations
D) paid-in capital and retained earnings
Which of the following is the two main source or major sections of a shareholders' equity? A) retained earnings and long term debt B) stock and bond subscriptions receivable C) long-term debt and notes receivable D) paid-in capital and retained earnings E) treasury stock and paid-in capital
C. The purchase of treasury shares DOES NOT DECREASE the number of shares issued; only the outstanding shares decrease.
Which of the following statements are FALSE? a. Treasury stock is not an asset, it is deducted from the total shareholder's equity b. Two methods in accounting treasury stock transactions par or stated value and cost method c. The purchase of treasury shares does not increase the number of shares issued d. The account, Treasury Stock, will have either a zero balance or a debit balance.
b.) No-Par value shares may not be issued
Which of the following statements are False? a.) After distribution of Large Share Dividend The balance in the account Share Premium will still remain the same for large dividends are recorded at par value. b.) Par value shares may not be issued without being fully paid c.) 25%min for authorize Share Capital Subscribed 25%min Total subscription must be paid paid-up capital not less than ₱5,000 d.) The President of the corporation must be the director
d.) The board of directors DOES NOT bind the corporation to one bidder.
Which of the following statements are False? a.) Shareholders may be natural or juridical persons b.) Treasury shares may be disposed in any manner subject to the Provisions of the Corporation Code. c.) Treasury Shares are not legal capital but can be sold. d.) The board of directors binds the corporation to one bidder.
ALL ARE TRUE
Which of the following statements are True a.) If a corporation has issued only one type of stock, it is common stock. b.) The par value of common stock usually has no economic significance. c.) If a corporation issues 10% Preferred Stock $100 Par on a day when the financial markets demand 9%, this corporation's 10% Preferred Stock will sell for more than its par value. d.) If a common stock does not have a par value or a stated value, the entire proceeds from issuing the stock is credited to one account entitled ordinary shares.
d.) None
Which of the following statements are false? a.) All issued and fully paid shares, and all subscribed(subscribed shares must be par value shares) are entitled to dividends when declared b.) Unissued shares, subscribed no-par value shares and treasury shares are not entitled to dividends. c.)In small share dividends when the fair market value is lower than the par or stated value, the par or stated value will be the basis of recording d.) None
d) None
Which of the following statements are false? a) On the date of declaration, the board of directors will adopt a resolution declaring that a dividend is to be paid in cash or property becomes a liability on this date. b) Cash dividends are declared solely by the board of directors while share dividends will necessitate the concurrence of at least two-thirds of the outstanding shareholders c) When a small stock dividend is declared, the market value of the new shares is transferred from Retained Earnings to Dividend Payable accounts. d) None
b. These donated shares are essentially treasury stocks CAN BE ISSUED at any price
Which of the following statements are false? a. Corporation receiving ordinary shares from its major shareholder as a gift are entered as a memorandum entry b. These donated shares are essentially treasury stocks are issued at a fixed price c. The shares purchased may be subsequently retired. d. The number of shares issued is reduced by the stock retired. The treasury stock account is credited at cost.
All of them are true
Which of the following statements are true? A) Declared dividends is prepared at the date of record, if an investor buys a stock on this date, he will not receive dividend and will be traded as ex-dividend. B) In declaring cash dividends, a corporation must have both an appropriate amount of retained earnings and the necessary amount of cash C) A corporation may accumulate earnings and at the same time not be sufficiently liquid to pay large dividends D) When the BOD declares a cash dividend, an entry is made debiting Retained Earnings and crediting Cash Dividends Payable
All are True
Which of the following statements is true in regarding treasury stock? A) it has no voting rights B) Its buy back decreases assets and share holder's equity C) donated shares are essentially treasury stocks may be issued at any price D) have been issued and fully paid for but reacquired to support employee stock compensation plans
B) Corporate officers are appointed by the BOARD OF DIRECTORS (also known as the top governing body of the corporation)
Which statement is False A) A Corporation has an implied authority to enter to a contract of joint venture with other corporations except a contract of partnership B) Corporate officers are appointed by the Shareholders C) Restricted earnings is also known as Appropriated earnings D) Shareholders elect the Board of Directors and the elected is responsible for appointing corporate officers