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The data below are from the December 31, 20x2, balance sheet of the HC Corporation: Common share, P50 par, 3,000 shares issued and outstanding
- The data below are from the December 31, 20x2, balance sheet of the HC Corporation: Common share, P50 par, 3,000 shares issued and outstanding P 150,000 Paid-in capital in excess of par 45,000 Retained earnings 75,000 During 20x3, the following transactions affecting corporate capital were recorded: Aug. 16 Purchased 400 shares of treasury share at P78 per share. Oct. 23 Purchased 225 shares at P71 per share and immediately retired the share. Nov. 3 Sold 150 shares of the treasury share purchased on Aug. 16 at P81 per share. Aug. 16 Treasury share Cash (400 x P78) 31,200 31,200 Oct. 23 Common share (225 x P50) Share premium (225 x P15) Retained earnings (225 x P6) Cash (225 x P71) Note: Original share premium upon issuance should be derecognized. 45,000 ÷ 3,000 = P15. The excess over the cost of retirement to the original issue costs is charged to retained earnings (71 – 50 – 15 = 6). 11,250 3,375 1,350 15,975 Nov. 3 Cash (150 x P81) Treasury share (150 x P78) Share premium – treasury (150 x P3) 12,150 11,700 450
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