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  • Prob 21 21

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    Rhea Jane Parcon
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    King Company originally had 400,000 ordinary shares. During the year, it purchased 50,000 treasury shares for $1,500,000 total. It conducted a 4 for 1 stock split, increasing shares to 1,600,000. It then reissued 20,000 treasury shares for $400,000, leaving the remaining cost of treasury shares at $1,350,000. The number of shares outstanding at year-end was 1,420,000.

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    Prob-21-21

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    King Company originally had 400,000 ordinary shares. During the year, it purchased 50,000 treasury shares for $1,500,000 total. It conducted a 4 for 1 stock split, increasing shares to 1,600,000. It then reissued 20,000 treasury shares for $400,000, leaving the remaining cost of treasury shares at $1,350,000. The number of shares outstanding at year-end was 1,420,000.

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    670 views4 pages

    Prob 21 21

    Uploaded by

    Rhea Jane Parcon
    King Company originally had 400,000 ordinary shares. During the year, it purchased 50,000 treasury shares for $1,500,000 total. It conducted a 4 for 1 stock split, increasing shares to 1,600,000. It then reissued 20,000 treasury shares for $400,000, leaving the remaining cost of treasury shares at $1,350,000. The number of shares outstanding at year-end was 1,420,000.

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    of 4

    CHAPTER 21

    Shareholders’ Equity
    Share Split
    PROBLEM 21-21

    King Company had 400,000 ordinary shares


    P15 par value at the beginning of current year.
    During the current year the entity purchased
    50,000 treasury shares at P30 per share,
    issued a 4 for 1 split and then reissued 20,000
    treasury shares at P20 per share.
    What amount should be reported as remaining cost of treasury
    shares?

    Treasury shares - Purchase 50,000 x 30 = 1,500,000

    50,000 x 4 = 200,000
    20,000/ 200,000 = 0.1

    Treasury shares - Reissued 1,500,000 x 10% = (150,000)


    Remaining Treasury Shares 1,350,000
    What is the number o year outstanding at year-end?

    Ordinary Shares 400,000


    Less: Remaining Treasury Shares 45,000
    Outstanding shares before split 355,000

    Shares Issued (400,000 x 4 ) 1,600,000


    Treasury Shares (45,000 x 4 ) 180,000
    Outstanding Shares 1,420,000

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