PRADA CORPORATION: A COMPREHENSIVE CASE ON SHAREHOLDERS' EQUITY Prada Corporation's Contributed Capital section of its January 1, 2X20 statement of financial position shows the following: Preference share capital (6%, P50 par, 8,000 shares authorized, 3,400 shares issued and P170,000 outstanding) Ordinary share capital (P10 stated value, 30,000 shares authorized, 12,000 shares issued and 120,000 outstanding) Preference shares subscribed (800 shares at P54 per share) 40,000 Share premium - Preference shares 12,800 Share premium - Ordinary shares 72,000 Total contributed capital P414,800 Mar 6 24 Jul 6 3 22 13 During 2X20, the company entered into the following transactions: Jan 3 Established a compensatory share option plan for its key executives. The options vest after a 3-year service period. The estimated fair value of the options expected to be exercised is P81,000 Received the remaining P40 per share on the subscribed preference shares and issued shares. Apr Sold 300 preference shares at P55 per share. May 5 Received a subscription down payment of P6 per share on 1,000 ordinary shares. The remaining P11 per share balance is due in 60 days. Jun Sold 600 ordinary shares at P17 per share. Received the remaining balance on subscribed ordinary shares and issued shares. Sep Purchased building by paying P9,000 cash and issuing 800 ordinary shares and 450 preference shares. Ordinary and preference shares are currently selling for P19 and P57 per share, respectively Oct Reacquired 900 ordinary shares at P19.50 per share. The company uses the cost method to account for treasury shares. Nov 14 Issued for P32,000 a combination of 700 ordinary shares and 12% bonds with a face value of P20,000. The ordinary share is currently selling for P18 per share. No market value exists for the bonds Dec 15 Reissued the 900 treasury shares at P20.50 per share. Distributed a P3 per share dividend to all outstanding preference shares and P1.50 per share dividend to all ordinary shares outstanding on this date. Declared a 2-for-1 share split on the ordinary shares, reducing the stated value to P4 per share and increasing the authorized shares to 60,000 Requirement (2 items x 25 points): 1. Prepare the contributed capital section of the December 31, 2X20 statement of financial position 2. Prepare all the entries for the transactions that occurred in year 2x20. Rubric for grading (per Item) PERFORMANCE INDICATORS Dec 28 Dec 29 POINTS PRADA CORPORATION: A COMPREHENSIVE CASE ON SHAREHOLDERS' EQUITY Prada Corporation's Contributed Capital section of its January 1, 2X20 statement of financial position shows the following: Preference share capital (6%, P50 par, 8,000 shares authorized, 3,400 shares issued and P170,000 outstanding) Ordinary share capital (P10 stated value, 30,000 shares authorized, 12,000 shares issued and 120,000 outstanding) Preference shares subscribed (800 shares at P54 per share) 40,000 Share premium - Preference shares 12,800 Share premium - Ordinary shares 72,000 Total contributed capital P414,800 Mar 6 24 Jul 6 3 22 13 During 2X20, the company entered into the following transactions: Jan 3 Established a compensatory share option plan for its key executives. The options vest after a 3-year service period. The estimated fair value of the options expected to be exercised is P81,000 Received the remaining P40 per share on the subscribed preference shares and issued shares. Apr Sold 300 preference shares at P55 per share. May 5 Received a subscription down payment of P6 per share on 1,000 ordinary shares. The remaining P11 per share balance is due in 60 days. Jun Sold 600 ordinary shares at P17 per share. Received the remaining balance on subscribed ordinary shares and issued shares. Sep Purchased building by paying P9,000 cash and issuing 800 ordinary shares and 450 preference shares. Ordinary and preference shares are currently selling for P19 and P57 per share, respectively Oct Reacquired 900 ordinary shares at P19.50 per share. The company uses the cost method to account for treasury shares. Nov 14 Issued for P32,000 a combination of 700 ordinary shares and 12% bonds with a face value of P20,000. The ordinary share is currently selling for P18 per share. No market value exists for the bonds Dec 15 Reissued the 900 treasury shares at P20.50 per share. Distributed a P3 per share dividend to all outstanding preference shares and P1.50 per share dividend to all ordinary shares outstanding on this date. Declared a 2-for-1 share split on the ordinary shares, reducing the stated value to P4 per share and increasing the authorized shares to 60,000 Requirement (2 items x 25 points): 1. Prepare the contributed capital section of the December 31, 2X20 statement of financial position 2. Prepare all the entries for the transactions that occurred in year 2x20. Rubric for grading (per Item) PERFORMANCE INDICATORS Dec 28 Dec 29 POINTS