Answered: Refer to Alom, How much are the total…

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 4MC: Effective May 1, the shareholders of Baltimore Corporation approved a 2-for-1 split of the companys...

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Question

On the date of incorporation, the condensed balance sheet of Alom Partnership showed the following:

Cash            P 28,000
Other Assets            256,000
Liabilities            50,000
Alpha Capital            180,000
Omega Capital            54,000

The Securities and Exchange Commission authorized the corporation to issue the following shares:

o 10,000 shares of 12% Preference Share Capital, par P 100; and
o 20,000 shares of Ordinary Share Capital, par P 50.

The corporation issued 1,500 preference shares and 800 ordinary shares to Alpha in exchange for her equity in the partnership. On the other hand, Omega received 1,500 preference shares and 1,200 ordinary shares for her equity in the partnership. Any capital deficiency of the partners will be paid in cash. Three other incorporators each subscribed at par, 1,500 preference shares and 2,000 ordinary shares paying only 25% of their subscriptions and the balance payable in two months from the date of subscription.

Refer to Alom, How much are the total assets of the new corporation?