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2. You were engaged by City Corporation, a publicly held company whose shares are traded on the Philippine stock exchange, to conduct an audit of its 2019 financial statements. You were told by the company's controller that there were numerous equity transactions that took place in 2019. The shareholders' equity accounts at Dec 31, 2018 had the following balances: Share capital - preference, 100 par value, 6% cumulative; 30,000 shares authorized; 18,000 shares issued and outstanding 1,800,000 Share capital - ordinary 1 par value, 1,800,000 shares authorized; 1,200,000 shares issued and outstanding 1,200,000 Share premium 2,400,000 Retained earnings 980,000 Total shareholders' equity 6,380,000 You summarized the following transactions during 2019 and other information relating to the shareholders' equity in your working papers as follows: January 6, 2019 - issued 45,000 ordinary shares in exchange for land. On the date issued, the shares had a market price of 16.50 per share. The land had a carrying value of 420,000 and an assessed value for property taxes of 490,000 January 31, 2019 - sold 2,400, P1,000 12% bonds due Jan 31 2029, at 98 with one detachable share warrant to each bond. Interest is payable annually on Jan. 31. The fair value of the bond without the share warrant is 95. The detachable share warrants have a fair value of P50 each and expire on Jan 31 2020. Each warrant entitles the holder to purchase 10 ordinary shares at P10 per share. February 28, 2019 - subscriptions for 42,000 ordinary shares were received at P26 per share, payable 50% down and the balance by March 15. March 15 2013 - the balance due on 36,000 ordinary shares was received and those shares issued. The subscriber who defaulted on the 6,000 remaining shares forfeited the down payment in accordance with the subscription agreement. September 14, 2019 - there were 1,890 warrants detached from the bonds and exercised. November 30, 2019 - declared a cash dividend of .50 per share to all ordinary shareholders of record Dec. 15, 2019. The dividend was paid on Dec. 30, 2019. December 15, 2019 - declared the required annual cash dividends of preference shares for 2019. The dividend was paid on January 15, 2020. January 8, 2020- before closing the accounting records for 2019, City become aware that no depreciation had been recorded for 2018 for a machine purchased on July 1, 2018. The machine was properly capitalized at 960,000 and had an estimated useful life of eight years when purchased. The appropriate correcting entries was recorded on the same date. ADJUSTED net income for 2019 was 840,000. Based on the following and the result of your audit, answer the following (ignore tax implications): Share capital - ordinary at Dec. 31, 2019 is How much is the total share premium as of Dec. 31, 2019 The unappropriated retained earnings on Dec. 31, 2019 is How much is the total shareholders' equity on Dec. 31, 2019
