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Shena Company reported the following accounts in the year-end trial balance: Preference share capital authorized (P100 par value), 2,500,000; Ordinary share capital(authorized 100,000 shares, no par value,issued 90,000 shares, P15 stated value), 1,350,000; Subscription receivable, ordinary, 85,000; Subscription receivable, preferred, 100,000; Preference share capital subscribed, 150,000; Ordinary share capital subscribed, 135,000; Treasury preference shares (2,500 shares at cost), 300,000; Retained Earnings, 1,000,000; and Share premium – ordinary, 475,000
Shena Company reported the following accounts in the year-end trial balance: Preference share capital authorized (P100 par value), 2,500,000; Ordinary share capital(authorized 100,000 shares, no par value,issued 90,000 shares, P15 stated value), 1,350,000; Subscription receivable, ordinary, 85,000; Subscription receivable, preferred, 100,000; Preference share capital subscribed, 150,000; Ordinary share capital subscribed, 135,000; Treasury preference shares (2,500 shares at cost), 300,000; Retained Earnings, 1,000,000; and Share premium – ordinary, 475,000. What is the total issued share capital? *
a. 3,850,000
b. 1,539,000
c. 1,350,000
d. 2,950,000
Expert Solution
The correct answer is C) $1,350,000.
Supporting explanations:
The preference share capital is not yet issued as it is only subscribed and the subscribed capital is not treated as issued capital because issued capital is the capital that is held by investors (purchased or invested by shareholders) but the subscribed capital is the capital where investors are promised to buy them once they are released by the company so the ordinary share capital of $1,350,000 is only issued capital.
Hence, the correct answer is C) $1,350,000.
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