he Gangnam Company began operations in January 2019 and reported the following results for each of its three years of operations. 2019 – P520,000 loss; 2020 – P80,000 loss; 2021 – P1,600,000 profit At December 31, 2020, Gangnam Company’s capital accounts were as follows: 8% Cumulative Preference Share Capital, P100 par, 50,000 shares authorized, issued and outstanding- P5,000,000; Ordinary Share Capital, P10 par, 1,000,000 shares authorized, 750,000 shares issued and outstanding- P7,500,000 Gangnam Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2019. The corporation law permits dividends only from retained earnings. What is the book value of the ordinary share at December 31, 2020 assuming that the preference share has a liquidating value of P106 per share?
he Gangnam Company began operations in January 2019 and reported the following results for each of its three years of operations. 2019 – P520,000 loss; 2020 – P80,000 loss; 2021 – P1,600,000 profit At December 31, 2020, Gangnam Company’s capital accounts were as follows: 8% Cumulative Preference Share Capital, P100 par, 50,000 shares authorized, issued and outstanding- P5,000,000; Ordinary Share Capital, P10 par, 1,000,000 shares authorized, 750,000 shares issued and outstanding- P7,500,000 Gangnam Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2019. The corporation law permits dividends only from retained earnings. What is the book value of the ordinary share at December 31, 2020 assuming that the preference share has a liquidating value of P106 per share?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 18P
Related questions
Question
The Gangnam Company began operations in January 2019 and reported the following results for each of its three years of operations. 2019 – P520,000 loss; 2020 – P80,000 loss; 2021 – P1,600,000 profit
- At December 31, 2020, Gangnam Company’s capital accounts were as follows: 8% Cumulative
Preference Share Capital, P100 par, 50,000 shares authorized, issued and outstanding- P5,000,000; Ordinary Share Capital, P10 par, 1,000,000 shares authorized, 750,000 shares issued and outstanding- P7,500,000 - Gangnam Company has never paid a cash or bonus issue and there has been no change in its capital accounts since it began operations in 2019. The corporation law permits dividends only from
retained earnings .
What is the book value of the ordinary share at December 31, 2020 assuming that the preference share has a liquidating value of P106 per share?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning