1.) The stockholders equity section of JM Company revealed the following information on December 31 2020: Preferred stock, P100 par, 2,300,000; Paid in capital in excess of par-preferred, 805,000; common stock, P15 par, 5,250,000; Paid-in capital in excess of par-common, 2,750,000; subscribed common stock, 500,000; retained earnings, 1,900,000; Note payable, 4,000,000; Subscription receivable-common, 400,000. How much is the legal capital? *

a. 8,050,000

b. 7,650,000

c. 11,605,000

d. 9,950,000

2.) In 2019, Line Company issued for P105 per share, 8,000 shares of P100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Ovals P25 par value common stock at the option of the shareholder. In August 2020, all of the preferred stock was converted into common stock. The market value of the common stock on the date of conversion was P30 per share. What amount should be credited to additional paid in capital as a result of the issuance of the preferred stock and its subsequent conversion into common stock?

a. 200,000

b. 120,000

c. 80,000

d. 240,000

3.) Jolly Corporation was authorized to issue 100,000 shares of P50 par value stock on January 1, 2019. Eighty thousand shares were sold during the first year at P50 per share and 4,000 shares were later reacquired as treasury at 65 per share. A stock split of 5 to 1 was approved on December 31, 2020, a 10% stock dividend was paid and on March 1, 2020, the treasury stock was reissued at P68 per share. The number of shares issued and outstanding on March 1, 2020 is

a. 438,000

b. 418,000

c. 422,000

d. 440,000