TECHNOLOGICAL INSTITUTE OF THE PHILS.

MANILA
QUIZ NO. 1
ACCTG. 363
1. The following information has been taken from the ledger accounts of Bangkok Corporation;
Total net income since incorporation
P3,200,000
Total cash dividends paid
150,000
Fair value of the companys investment in Thai Company
Declared as property dividend
600,000
Proceeds from sale of donated stock
150,500
Total value of stock dividends distributed
420,000
Gains on treasury stock transactions
375,000
Unamortized premium on bonds payable
413,200
Appropriated for contingencies
700,000
The current balance of unappropriated retained earnings is 1,330,000
2. Indonesia Companys December 31, 2009 audited financial position reported retained earnings of P150,000.
Net income for 2009 was P85,000, and dividends of P60,000 were declared and paid in 2009. Indonesias
account discovered that net income for 2008 had been understated by P25,000 due to an error in recording
depreciation expense for 2008. The amount of retained earnings per book as of December 31, 2008 was
P100,000
3. The following selected accounts were taken from the December 2009 trial balance of Malaysia Corporation:
Subscribed capital stock
P1,250,000
Treasury stock, 600 shares, at cost
90,000
Unissued ordinary shares
6,000,000
Share premium
180,000
Appropriation for plant expansion
500,000
Retained earnings
1,200,000
Authorized ordinary shares
, 100,000 shares
10,000,000
Subscription receivable
320,000
The minutes of meetings of the board of directors reveal that on December 5, 2009, the companys board declared
a 10% cash dividend payable to shareholders and subscribers of record on December 20, 2009. The dividends
checks are to be distributed on January 10, 2010. The companys accountant has not recorded this dividend
declaration. What is the amount of unrecorded dividend payable? P519,000
Thailand Company has been paying regular quarterly dividends to its shareholders. The following equity
transactions are shown in the companys books:
Jan.
1
P2 par value ordinary share; (1,600,000 shares outstanding ; 3,000,000 shares
authorized.)
Feb.
15
Issued 100,000 new shares at P5.
Mar.
31
Paid quarterly dividends of P2,550,000
May
13
P2,000,000 of P1,000 bonds were converted to ordinary shares at the rate of 100 shares of
stock per
P1,000 bond.
June 16
Issued an 11% stock dividend
30
Paid quarterly dividends. The dividend per share is the same as that paid in the first
quarter.
No other equity transactions occurred after June 30.
4. What is the amount of dividend per share that Thailand paid on march 31? P1.50
5. What is the amount of dividend that Thailand will have to pay in the third quarter in order to pay the same
dividend rate as that paid in previous quarter?
P3,163,500
6. What is the total amount of dividends to be paid during the year 2009?
P12,040,500
On August 1, 2010, Misery Company declared one of its property as dividend with a fair value of P2,200,000 and
carrying value of P2,500,000. Actual distribution of the property is expected to be May 1, 2011. On December 31,
2010, the property has a fair value of P2,000,000.
7. What amount should be charged to the retained earnings at the time the dividend was declared?
P2,200,000

8. What amount should the company recognize as a liability in its 2010 statement of financial position related to
dividends? 2,000,000
9. What amount of asset held for distribution should the company disclose separately in its 2010 statements of
financial position related to the dividends? P2,000,000
10. What amount of gain or loss should the company disclose in its 2010 statement of comprehensive income
related to the dividends?
P500,000
11. On January 1, 2009, Kate Company has granted share options to its employees. The total expense to the
vesting date on December 31, 2012 has been calculated at P8,000,000. The entity has decided to settle the
award early on December 31, 2011. The expense charged since the date of grant on January 1, 2009 was
P2,000,000 for 2009 and P2,100,000 for 2010. The expense that would have been charged for 2011 is
P2,200,000. What would be the compensation expense for 2011? 3,900,000
12. On January 1, 2011, Door Company granted an employee an option to purchase 20,000 ordinary shares with
P5 par value at P20 per share. The option became exercisable on December 31, 2012, after the employee
completed two years of service. The fair value of the share option is P15. The option was exercised on January
10, 2013. The share prices are P30 on January 1, 2011, P50 on December 31, 2011, and P60 on January 10,
2013. What is the compensation expense for 2011? 150,000
13. Ira Company granted 10,000 share options to each of its five directors on January 1, 2011. The options vest on
January 1, 2015. The fair value of each options on January 1, 2011 is P50 and its anticipated that all of the
share options will vest on January 1, 2015. What will be the increase in expense and equity for the year ended
December 31, 2011? 625,000
14. Elmer Company issued fully paid shares to 200 employees on December 31, 2011. Normally, shares issued to
employees vest over a two-year period but these shares have been given as a bonus to the employees
because of their exceptional performance during the year. The shares have a market value of P500,000 on
December 31, 2011 and an average fair value of P600,000 for the year. What amount would be expense for this
share based payment transaction? 500,000
15. On January 1, 2011, Excel Company offered its chief executive officer share appr4eciation rights with the
following terms: Predetermined price on January 1, 2011, P100; Number of shares, 10,000 shares; service
period, 3 years; exercise date, December 31, 2013. The share appreciation rights are exercised on December
31, 2013. The quoted [rice per share is as follows: January 1, 2011, P100 December 31, 2011, P118;
December 31, 2012, P112, December 31, 2013, P124. What is the compensation expense that should be
recognized for 2012? 20,000
16. Mesa Company has granted 100 share appreciation rights to each of its 1,000 employees on January 1, 2011.
The management feels that on December 31, 2011, 90% of the awards will vest on December 31, 2013. The
fair value of each share appreciation right on December 31, 2011 is P10. What is the fair value of the liability for
the share appreciation rights on December 31, 2011? 300,000
17. On January 1, 2011, Plane Company purchased an equipment with a cash price of P2,000,000. The supplier
can choose how the purchase is to be settled. The choices are 200,000 shares with par value of P50 in one
years time, or cash payment equal to the market value of 15,000 phantom shares on December 31, 2011. At
grant date on January 1, 2011, the market price of each share is P80 and on the date of settlement on
December 31, 2011, the market price of each share is P100. What is the equity component arising from the
purchase of equipment with share and cash alternative? 800,000
18. What is the interest expense to be recognized on December 31, 2011 if the supplier has chosen the cash
alternative? 300,000
19. What is the share premium on December 31, 2011 if the supplier has chosen the share alternative? 1,000,000
20. ON January 1, 2011 More Company granted Dan, its president, 20,000 share appreciation rights for past
services. These rights are exercisable immediately and expire on December 31, 2012. On exercise , Dan is
entitled to receive cash for the excess of the market price on the exercise date over the market price on the
grant date. Dan did not exercise any of the rights during 2011. The market price of More companys share was
P30 on January 1, 2011 and P45 on December 31, 2011. As a result of the share appreciation rights, what
amount should be recognized as compensation expense for 2011? 300,000
21. The shareholders; equity of Rey Company on December 31, 2011 included the following;
12% Preference share capital, 20,000 shares, P100 par value
P2,000,000
14% Preference share capital, 10,000 shares, P300 par value
3,000,000
Ordinary share capital, 50,000 shares, P100 par value
5,000,000
Retained earnings
2,240,000
Share premium
1,500,000
The 12% preference share is cumulative and fully participating. The 14% preference share is noncumulative
and fully participating. Dividends have not been paid for 3 years. What is the book value per ordinary share?

22. Book value per 12% preference share? 156 Book value per 14% preference share? 140