You were assigned to audit the JKL Corporation's equity accounts and the related capital transactions for the period ended December 31, 2020. In studying the said transactions, you came across the following entries made by the client.

Date Particulars Debit Credit

Jan. 15 Property and equipment 500, 000

Share capital 500, 000

To record the issuance of 50, 000 shares

of ordinary in exchange of a real property.

Mar. 1 Subscription receivable 190, 000

Share capital 190, 000

To record the subscription of 10, 000

shares of ordinary at P19 per share subscription price.

Jun. 1 Share capital 75, 000

Cash 75, 000 To record the acquisition of 5, 000 shares of the company's own ordinary shares.

July 15 Cash 133, 000

Subscription receivable 133, 000

To record the collection for the full payment of 70% of the subscribed shares on March 1.

Sept 2 Cash 40, 000

Share capital 40, 000

To record the reissuance of 4, 000 treasury shares on hand

Nov 1 Property and equipment 75, 000

Gain from donations 75, 000 To record the receipt of an equipment fairly valued at P75, 000 from a major stockholder.

Dec 29 Accumulated profits 300, 000 Ordinary Share Option Outstanding 300,000

To record the grant of 10 employees 2, 00 share options valued at fair value of options on the grant date computed as: (10*2, 000*P15)

Audit Note:

a. The company was authorized to issue 100, 000 share of ordinary at P10 par value.

b. The real property received on January 15, were fairly valued at P1, 500, 000, 40% of which is attributed to the land

c. A 4 for 1 share split up was declared by the company on August 1. The same has been accounted for through a memo entry.

d. The options were granted to key employees at beginning of the year and shall be exercisable after 3 years provided that the employees stay with the company and that revenues by the end of the third year have increased by 200% based on 2019 revenue. If sales have increased by200% by the third each employee shall receive 2, 000 options. If Sales have increased by 250% each employee shall receive 2, 500 options. If sales have increased by 300% on the third year each employee shall receive 3, 000 options. The company reported revenues of P10M in 2019 and P155M in 2020. The company estimates that this trend is expected to continue by the end of the third year. Moreover, the company by the end of the third year.

e. On December 5, Board of Directors approved a P0.50 per share cash dividends to stockholders of record as of December 20 payable on January 30 of the subsequent year.

13. What is the credit to share premium/additional paid-in capital accounts as a result of the business of the issuance of shares on January 15?

a. 100, 000

b. 400, 000

c. 500, 000

d. 1, 000, 000

14. The correct entry to record the reissuance of treasury shares on September shall involve:

a. Credit to share premium at P25, 000

b. Credit to share premium at P15, 000

c. Credit share premium at P60, 000

d. Credit to accumulated profits P60, 000

15. How much is the correct compensation/salaries expense for 2020 as a result of the share options granted to employees?

a. 87, 500

b. 70, 000

c. 100, 000

d. 105, 000

16. What is the total cash dividends payable as of December 31, 2020?

a. 25, 500

b. 24, 000

c. 112, 000

d. 106, 000

17. What is the adjusted balance of the ordinary shares account as of December 31, 2020?

a. 500, 000

b. 530, 000

c. 570, 000

d. 600, 000

18. What is the total additional paid-in-capital to be reported in the 2020 Statement of Financial Position?

a. 1, 277, 500

b. 1, 190, 000

c. 1, 202, 500

d. 1, 252, 500

19. How much is the treasury shares to be reported on the 2020 Statement of Financial Position?

a. 50, 000

b. 60, 000

c. 45, 000

d. 15,000