Quiz No. 3 Accounting and Tax Quiz (CLOSED)

An analysis of the shareholder’s equity of Future CPA Corporation as of January 1, 2006 is as follows:

Ordinary shares, par value P20, authorized 100,000 shares;

                Issue and outstanding 60,000 shares                        1,200,000

Capital in excess of par value                                                    140,000

Accumulated profits                                                                  760,000

Future CPA uses the cost method in accounting for treasury shares and during 2006 entered into the following transactions:

a. Acquired 1,000 of its shares for P35,000.

b. Sold 600 treasury shares at P38 per share.

c. Retired the remaining treasury shares

Question: Assuming no other equity transactions occurred during 2006 what should Medina report at December 31, 2006 as capital in excess of par value?

Answer: P135, 067

Congratulations!

Ms. Meishael Gay Tuliao

Mindanao State University - General Santos City

BS Accountancy

Graduated April 2011

Quiz No. 4 will be posted soon.