Intermediate Accounting 2-Worksheet;Ches. 14+15:2914\2021;Dr Ghaleb Abu Rummon;JU 15. PPP Corporation has issued 2,000 ordinary shares and 400 preference shares for a lump sum of 72,000 cash. (a) Give the entry for the issuance assuming the par value of the ordinary shares was 5 and the fair value 30, and the par value of the preference shares was 40 and the fair value 50. (Each valuation is on a per share basis and there are ready markets for each class of shares.) (b) Give the entry for the issuance assuming the same facts as (a) above except the preference shares have no ready market and the ordinary shares have a fair value of 25 per share. 16. AAA Corporation's statement of financial position reported the following: Share capital-ordinary outstanding, 5,000 shares, par 30 per share 150,000 Share premium-ordinary 80.000 Retained earnings 100.000 The following transactions occurred this year: (a) Purchased 120 ordinary shares of to be held as treasury shares paying 80 per share (b) Sold 90 of the treasury shares at 685 per share. (c) Sold the remaining treasury shares at 50 per share Prepare the journal entry for these transactions under the cost method of accounting for treasury shares. Page 3 of 4 Intermediate Accounting 2;Worksheet;Chs. 14+15;2914\2021;Dr Ghaleb Abu Rumman:JU 100 8% 5,000 none in arrears 17. The following information pertains to PPP Co.: Preference shares, cumulative: Par per share Dividend rate Shares outstanding Dividends Ordinary shares: Par per sha Shares issued Dividends Market price per share Share premium-ordinary Unappropriated retained earnings (after closing) Retained earnings appropriated for contingencies Ordinary treasury shares: Number of shares Total cost Net income vidends paid per share 10 80.000 2.70 48.00 200.000 135.000 150,000 5.000 125.000 370.000 Compute (assume no changes in balances during the past year): (a) Total amount of equity in the statement of financial position (b) Earnings per share (c) Book value per ordinary share (d) Payout ratio (e) Return on ordinary share equity 32 of 4 Intermediate Accounting 2;Wertsheet;Chs. 14+15;2914\2021;Dr Ghaleb Abu Rumman:JU Use the following information for questions 7 through 9: On January 1, 2019, EFG Co. issued eight-year bonds with a face value of 1,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are: Present value of 1 for 8 periods at 6%. .627 Present value of 1 for 8 periods at 8% 540 Present value of 1 for 16 periods at 3% 823 Present value of 1 for 16 periods at 4% 534 Present value of annuity for 8 periods at 6%. 8.210 Present value of annuity for 8 periods at 8%. 5.747 Present value of annuity for 18 periods at 3%. 12.561 Present value of annuity for 16 periods at 4%. 11.852 7. The present value of the principal is 8. The present value of the interest is 9. The issue price of the bonds is 10. A company issues 5,000,000. 7.8% 20-year bonds to yield 8% on January 1, 2019 Interest is paid on June 30 and December 31. The proceeds from the bonds are 4.901,038. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2019 statement of financial position? 11. On January 1, 2019, HIGK Co. sold 12% bonds with a face value of 800,000. The bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for 648.200 to yield 10%. Using the effective interest method of amortization, interest expense for 2019 is 12. On January 1, PQR Inc. issued 5.000.000,9% bonds for 4 895,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. FOR uses the effective-interest method of amortizing bond discount. At the end of the first year, POR should report bonds payable of 13 FGH Company issues 10.000.000 7.8% 20-year bonds to yield 8% on July 1, 2018 Interest is paid on July 1 and January 1. The proceeds from the bonds are $9.802,073 The balance reported in the bonds payable account on the December 31, 2018 statement of financial position? 14 On June 30, 2019. OPO Co. had outstanding 89., 3.000.000 face amount 15-year bonds maturing on June 30, 2020. Interest is payable on June 30 ano December 31 The unamortzed amount of the bono discount on June 30 2019 was 135.000. On June 30 2019 OF Cured all of these bonds at 94 and retired them. What net carrying amount should be used in computing gain or loss on this early extinguishment of debt? Page 2 of 4