The stockholders’ equity for ABC Company on December 31 was:Preference share, P20 par, 60,000 shares issued and outstanding1,200,000Share premium in excess of par – preference share300,000Ordinary share, P10 par, 300,000 shares issued and outstanding3,000,000Share premium in excess of par – ordinary share600,000Accumulated profit2,500,000 Each share of preference is convertible into 1 ordinary share. In June, ABC converted 4,000 of preference shares into ordinary shares. 1.) The entry to take up the conversion includes a credit to:Group of answer choicesPreference share for P80,000Ordinary share for P80,000Share premium for P60,000Accumulated profit for P60,0002.) Assuming that each share of preference is convertible into 4 ordinary shares and ABC converted 4,000 preference shares into ordinary, the entry to take up conversion includes a debit toGroup of answer choicesPreference share for P160,000Ordinary share for P160,000Accumulated profit for P60,000Accumulated profit for P80,000

The stockholders’ equity for ABC Company on December 31 was: Preference share, P20 par, 60,000…

Answered: Each share of preference is convertible…

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 1MP: Stockholders equity accounts and other related accounts of Gonzales Company as of January 1, 20--,...

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Question

The stockholders’ equity for ABC Company on December 31 was:

Preference share, P20 par, 60,000 shares issued and outstanding	1,200,000
Share premium in excess of par – preference share	300,000
Ordinary share, P10 par, 300,000 shares issued and outstanding	3,000,000
Share premium in excess of par – ordinary share	600,000
Accumulated profit	2,500,000

Each share of preference is convertible into 1 ordinary share. In June, ABC converted 4,000 of preference shares into ordinary shares.

1.)

Group of answer choices

Preference share for P80,000

Ordinary share for P80,000

Share premium for P60,000

Accumulated profit for P60,000

2.)

Assuming that each share of preference is convertible into 4 ordinary shares and ABC converted 4,000 preference shares into ordinary, the entry to take up conversion includes a debit to

Group of answer choices

Preference share for P160,000

Ordinary share for P160,000

Accumulated profit for P60,000

Accumulated profit for P80,000

Expert Solution