On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stack. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following Ordinary Shares, P10 par- P4,000,000 Subscribed ordinary shares-1,000,000 Share premium-600,000 Retained earnings-200,000 Treasury shares, 80,000 shares -1,750,000 What is the effect on the stockholders' equity as a result of the issuance of stock rights? A. 500,000 increase B. 2,500,000 increase C.no change D.200,000 increase
On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stack. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following Ordinary Shares, P10 par- P4,000,000 Subscribed ordinary shares-1,000,000 Share premium-600,000 Retained earnings-200,000 Treasury shares, 80,000 shares -1,750,000 What is the effect on the stockholders' equity as a result of the issuance of stock rights? A. 500,000 increase B. 2,500,000 increase C.no change D.200,000 increase
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 19P: Anoka Company reported the following selected items in the shareholders equity section of its...
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On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stack. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following
Ordinary Shares, P10 par- P4,000,000
Subscribed ordinary shares-1,000,000
Share premium-600,000
Retained earnings-200,000
Treasury shares, 80,000 shares
-1,750,000
What is the effect on the stockholders' equity as a result of the issuance of stock rights?
A. 500,000 increase
B. 2,500,000 increase
C.no change
D.200,000 increase
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