6) Which of the following statements is true?

a. No entry is required to record treasury share received as a donation because it has no cost. b. When treasury share is accounted for by the cost method, the treasury share account is reported as an unallocated negative element of total shareholders equity. c. When treasury share is formally retired, the only accounting recognition needed is a note to the financial statements. d. If treasury share is purchased at a cost in excess of its book value and then retired, book value per share (for the remaining shares) will remain the same.

10) When treasury shares are purchased for more than the issue price of the shares and the cost method is used to account for treasury shares, what account(s) should be debited?

a. Treasury shares for the purchase price. b. Treasury shares for the issue price and Paid-in Capital for the excess of purchase price over the issue price. c. Paid-in capital in excess of the issue price for the purchase price. d. Treasury shares for the issue price and retained earnings for the excess of the purchase price over the issue price.

11) Entity A has the following share capital transactions during the year:

Issued 10,000 shares with par value of P10 per share for a total consideration of P160,000. Received share subscriptions for 20,000 shares at a subscription price of P22 per share. Only half of the subscriptions were collected by the end of the year.

How much is the total share premium arising from the share transactions above?

Answer pattern: 1,000,000

12) Entity A was incorporated on January 1, 20x1 with an authorized capitalization is P1,000,000 divided into 100,000 shares with par value of P10 per share. The following were the share-related transactions during the year.

Cash subscriptions of 30,000 shares at P12 per share. Subscriptions of 40,000 shares at P18 per share. Seventy-five percent of the subscription price was collected during the year. How much is the Entity As total shareholders equity after recording the transactions above?

Answer pattern: 1,000,000