Whitestone Co. had the following selected information in its December 31, 2020 Stockholders’ Equity portion of its balance sheet:…

Whitestone Co. had the following selected information in its December 31, 2020 Stockholders’ Equity portion of its balance sheet:…

Question:

Don't use plagiarized sources. Get Your Custom Assignment on
Whitestone Co. had the following selected information in its December 31, 2020 Stockholders’ Equity portion of its balance sheet:…
From as Little as $13/Page

 

Transcribed Image Text:

Whitestone Co. had the following selected information in its December 31, 2020 Stockholders’ Equity portion
of its balance sheet:
10% Preference shares, P100 par value, 50,000 shares authorized,
10,000 shares issued and outstanding
Ordinary shares, P50 par value, 100,000 shares authorized, 50,000
shares issued, 5,000 shares reacquired at P75 per share
Share premium on preference shares
Share premium on ordinary shares
Ordinary share warrants outstanding
Accumulated profits
1,000,000
2,500,000
250,000
250,000
450,000
2,350,000
Additional information:
a. The ordinary share warrants outstanding account resulted from company’s issuance of 5,000, P1,000
12% bonds with detachable warrants on June 30, 2020. The bonds which pay annual interest every
December 31 were issued at total lump sum of P5,700,000. The bonds were quoted at 105 without the
warrants while each warrant attached to each P1,000 bond were selling at P25. Five warrants
surrendered together with P60 exercise price entitle the holder to acquire one ordinary share.
Warrants can be exercised 2 years from date of the issuance.
b.
On March 1, 2021 4,000 treasury shares were issued at P70 per share and retired the remaining
treasury shares.
c. On April 15, 2021 stock rights were issued to ordinary shareholders. Ten stock rights plus P50 per share
entitle the holder to acquire one additional ordinary share.
d. On June 1, 60% of the warrants issued in 2020 were exercised.
e. On August 15, all but 9,000 stock rights were exercised by the ordinary shareholders.
f. Net Income for the year 2021 amounted to P1,250,000.
Required: Compute for the following:
1. Correct balance of the ordinary share capital account as of December 31, 2021
2. Share premium resulting from the share issuance from the exercise of warrants
3. Total stockholders’ equity as of December 31, 2021.

Expert Answer:

Answer rating: 100% (QA)

Let s calculate the required information step by step 1 Correct balance of the ordinary share capita
View the full answer