Problem 24-1 (AICPA Adapted)

On January 1, 2016, Eagle company reported P1,750,000 of appropriated retained earnings for the construction of the new office building, which was completed in 2016 at a total cost of P1,500,000.

In 2016, P2,000,000 of cash was restricted for the retirement of bonds due in 2017.

In the December 31, 2016 statement of financial position, what amount should be reported as appropriated retained earnings?

a.1,200,000

b.1,450,000

c.2,950,000

d.3,200,000

Problem 24-2 (AICPA Adapted)

On January 1, 2016, Rama Company had 20,000 treasury shares of P100 par value that have been acquired in 2015 at P120 per share.

In December 2016, the entity reissued 15,000 of these treasury share at P150 per share. The cost method is used to record treasury transactions.

On December 31, 2016, what amount should be reported as a restriction of retained earnings as a result of the treasury share transactions?

a.2,400,000

b.1,800,000

c.600,000

d.500,000

Problem 1

Irish Company granted 10,000 share options to each of its five directors on January 1,2015. The options vest on January 1,2019. The fair value of each option on January 1, 2015 is P50 and it is anticipated that all of the share options will vest on January 1,2019.

What amount should be reported as increase in expense and equity for the year ended December 31, 2015?

750,000

500,000

625,000

125,000

Problem 2

In connections with a share option plan for the benefit of key employees. Ward company intends to distribute treasury shares when the options are exercised. These shares were bought in 2014 at P42 per share. On January 1,2015 the entity granted share options of 100,000 shares at an option price of P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a 2-year period beginning January 1,2018, by grantee still employed by the entity. Market price of share was P47 at the grant date. The fair value of the share option is P12 on grant date. No share options were terminated during 2015.

What amount should be reported as compensation expense for 2015?

600,000

400,000

300,000

450,000

Problem 26-1

On January 1, 2015, Morey Company granted Dean, the president, 20,000 appreciation rights for past services. These rights are exercisable immediately and expire on January 1, 2017. On exercise, Dean is entitled to received cash for the excess of the share market price on the exercise date over the market price on the grant date. Dean did not exercise any of the rights during 2015. The market price on Moreys share was P30 on January 1, 2015 ad P45 on December 31, 2015.

As a result of the share appreciation rights, what amount should be recognized as compensation expense for 2015?

1. 0

2. 100,000

3. 300,000

4. 600,000

Problem 26-2

Elizabeth Company granted 100 share appreciation rights to each of the 1,000 employees in January 2015. The entity estimated that 90% of the awards will vest on December 31, 2017. The fair value of each share appreciation right on December 31,2015 is P10.

What is the accrued liability on December 31, 2015?

1. 300,000

2. 900,000

3. 100,000

4. 90,000

PROBLEM 27-1 Tarr Company reported the following shareholders equity on December 31, 2016: Preference share capital 12%, P50 par, 20,000 sahres 1,000,000 Ordinary share capital, P25 par, 100,000 shares 2,500,000 Share premium 200,000 Retained Earnings 400,000 Retained Earning appropriated 100,000 Revaluation surplus 300,000 Dividends on preference share have not been paid since 2014. The preference sahre has a liquidating of P55 and a call price of P58. What is the book value per preference share? a. 61 b. 56 c. 55 d. 58

PROBLEM 27-2 Hoyt Company reported the following shareholders equity at year-end: 5% cumulative preference share capital, par value P100 per share, 25,000 shares issued and outstanding 2,500,000 Ordinary share capital, par value P35 per share; 100,00 sahres issued and outstanding 3,500,000 Share premium 1,250,000 Retained earnings 3,000,000 Dividends in arrears on the preference share amounted to P250,000. If the entity were to be liquidated, the preference shareholders would receive par value plus a premium of P500,000. What is the book value per ordinary share? a. 77.50 b. 75.00 c. 72.50 d. 70.00

Problem 31-1

On December 31, 2016 and 2015, Grow Company had 100,000 ordinary shares and 10,000 cumulative preference shares of 5%, P100 par value. No dividends were declared on either the preference or ordinary share in 2016 or 2015. Net Income for the current year was P900,000.

What amount should be reported as basic earnings per share?

8.50

9.50

9.00

5.00

Problem 31-2

Royal Company reported the following capital structure on Januray 1, 2016:

Shares issued and outstanding

Ordinary share capital 200,000

Preference share capital 50,000

On October 1, 2016, the entity issued a 10% stock dividend on ordinary shares and declared annual cash dividend of P200,000 on preference shares.

The preference shares are noncumulative, nonparticipating and nonconvertible.

Net income for the year ended December 31,2016, was P1,920,000.

What amount should be reported as basic earnings per share?

8.20

8.72

9.36

7.82

Problem 29-1

Monopoly Company had 100,000 equity shares in issue on January 1, 2016. On July 1, 2016, the entity issue 20,000 new shares by way of a 1 for 5 bonus. On October 1, 2016, the entity issued 28,000 new shares for cash at full market price.

When calculating basic earnings per share, what is the average number of shares?

100,000

117,000

148,000

127,000

Problem 29-2

On December 31, 2016, Peacock Company had 500,000 ordinary shares issued and outstanding 400,000 of which had been issued and outstanding throughout the year and 100,000 of which were issued on October 1, 2016. Net Income for the year was P5,100,000.

What amount should be reported as basic earnings per share?

10.10

12.75

12.00

11.35

Cox Company had 1,200,000 ordinary shares outstanding on January 1 and December 31, 2015. In connection with the acquisition of a subsidiary in June 2014, the entity is required to issue 50,000 additional ordinary shares on July 1, 2016 to the former owners of the subsidiary. The entity paid P200,000 annual preference dividend in 2015 and reported net income of P3,400,000 for the year. The preference share capital is noncumulative and nonconvertible.

What amount should be reported as diluted per share?

A. 2.83

B. 2.72

C. 2.67

D. 2.56

Problem 30-2

Dunn Company had 200,000 ordinary shares of P20 par value and 20,000 shares of P100 par, 6% cumulative, convertible preference share capital outstanding for the entire year ended December 31, 2015 Each preference share is convertible into 5 ordinary shares. The net income for the current year was P840,000

What amount should be reported as diluted earnings per share?

A. 2.40

B. 2.80

C. 3.60

D. 4.20

Problem 31-1 (AICPA Adapted)

Mann Company had 300,000 ordinary share s issued and outstanding on January 1, 2016, an additional 50,000 ordinary shares were issued for cash.

The entity also had unexercised share options to purchase 40,000 ordinary shares at P15 per share outstanding at the beginning and end of 2016. No value was assigned to the share options. The average market price of ordinary share was P20 during 2016.

What is the number of shares that should be used in computing diluted earnings per share?

325,000

335,000

360,000

365,000

Problem 31-2 (IFRS)

On January 1, 2016, Citadel Company had 500,000 ordinary shares outstanding with P100 par value.

On same date, the entity had also unexercised share options to purchase 50,000 share at P180 per share.

The fair value of the share option on grant date is P20. The average market price of ordinary share is P250.

What amount should be reported as diluted earnings per share?

30.00

29.18

29.41

28.57