TREASURY SHARES

SHARES OF THE CORPORATIONISSUED TO SHAREHOLDERSREACQUIRED BY THE CORPORATION

TREASURY SHARES ARE RECORDED AT COST.

LOSE THE RIGHT TO VOTE AND THE RIGHT TO RECEIVE DIVIDENDS

APPROPRIATED IN THE ACCUMULATED PROFITS

A DEDUCTION FROM THE TOTAL SHAREHOLDERS’ EQUITY

9-3a Cash 96,000

Share capital 80,000 Share premium 16,000

Issued 8,000 ordinaryshares at P 12 per share

b Treasury shares 21,000 Cash 21,000

Reacquired 1,500 sharesat P14 per share.

c Cash 9,600 Treasury shares 8,400 Shar premium-treasury 1,200

Reissued 600 treasury sharesat P16 per share

9-3d Cash 2,400

Share premium-treasury 1,200 Accumulated profits 600

Treasury shares 4,200 Reissued 300 shares at P8 per share

e Cash 2,000 Accumulated profits 800

Treasury shares 2,800 Reissued 200 treasury sharesat P10 per share

f Accumulated profits 5,600 Accumulated profits - appropriatedfor treasury 5,600

Appropriated remaining treasury shares

Reacquired shares 1,500 Reissued shares:

c 600 d 300 e 200 1,100

Remaining shares 400

Reissue price >Cost = gain Reissue price < Cost= loss If treasury shares are reissued at a gain, the gain is

credited to Share premium-treasury shares If treasury shares are reissued at a loss, the loss is

charged to Share Premium-Treasury shares but only up to the extent of its balance. The remaining amount of the loss will be charged to Accumulated Profits.

If the Share premium- Treasury shares account has a zero balance, the loss is charged to Accumulated Profits

7-4a Treasury shares - preference 26,500

Cash 26,500 Reacquired 500 preference shares at P53.

b Treasury shares - ordinary 14,000 Cash 14,000

Reacquired 700 ordinary shares at P20

c Cash 5,400 Treasury shares - ordinary 4,000 Ordinary Share premium - treasury 1,400

Issued 200 ordinary treasury sharesat P27.

d Cash 8,850 Preference share premium -treasury 900 Treasury shares-preference 7,950

Sold 150 treasury - preference shares atP59 per share

e Cash 1,800 Ordinary share premium-treasury 200

Treasry shares - ordinary 2,000 Sold 100 ordinary treasury shares @ P18.

Accumulated profits 26,550 Accumulated profits appropriated for ordinary treasury shares 8,000 Accumulated prodits appropriatedpreference treasury shares 18,550

Reacquired preference shares 500 Reissued preference treasury shares 150 Remaining preference treasury shares 350 Cost P 53For appropriation 18550

Reacquired ordinary shares 700 Reissued ordinary treasury shares 300 Remaining ordinary treasury shares 400 Cost P 20For appropriation 8,000

9-5

a Cash 45,000 Share capital 45,000

Issued 3,000 no par ordinary shares

b Cash 34,000 Share capital 34,000

Issued 2,000 shares @P17.

c Treasury shares 6,250 Cash 6,250

Acquired 500 shares @P12.50

d. Received 20 donated shares from a shareholder.

e Cash 2,200 Accumulated profits 300 Treasury shares 2,500 Sold 200 treasury shares @P11.

f Cash 260 Share premium - donated shares 260

g Cash 4,200 Treasury shares 3,750 Share premium 450 Reissued the remaining treasuryshares @P14.

CASE 7-2Share premiumShare premium PP 100,000100,000Aug. 17 Share premium Aug. 17 Share premium (1,000 x P2)(1,000 x P2) 2,000 2,0001. 1. Total share premiumTotal share premium PP 102,000 102,000 ==========2. No effect2. No effect

CASE 7-2No. of donated sharesNo. of donated shares 500 shares 500 sharesIssue price Issue price P14P143. Increase in share premium P7,0003. Increase in share premium P7,000 ========