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WorksheetsTreasury shares and Recapitalization
Total questions: 20
Worksheet time: 7mins
1. Treasury shares are stated at acquisition cost and are treated as deduction from shareholders' equity.
True
False
2. Treasury shares are not entitled to receive dividend.
true
False
3. Treasury shares reduce the number of issued and outstanding shares.
T
F
4. The issuing corporation could acquire from the market its own equity shares, even in cases when it has no accumulated profits.
T
F
5. The treasury shares are to be taken in the books at acquisition cost, but could not be re-issued at lower than cost.
T
F
6. Acquisition of treasury share is recorded as debit and to be reported in the statement of financial position as asset.
T
F
7. If treasury shares are acquired at P100,000 which is P25,000 above par, its re-issuance for P150,000 will increase the shareholders' equity at date of re-issuance by P50,000.
T
F
8. The treasury share is retired as a "loss," if its cost is higher than par value.
T
F
9. If an issuing corporation re-acquired its own shares at a cost higher than par and these are immediately retired, this will result in a "loss."
T
F
10. Donated capital when subsequently sold will increase the shareholder's equity by the total par value of the donated capital.
T
F
11. Share split changes the total amount of shareholders' equity but retains the number of outstanding shares.
T
F
12. Capital restructuring could be done through recapitalization.
T
F
13. Recapitalization will not change the total shareholders' equity.
T
F
14. The acquisition of treasury shares will require appropriation of accumulated profits at the equivalent par value of treasury shares acquired.
T
F
15. When treasury shares are subsequently re-issued at lower than cost, the available appropriation reserve for treasury shares first absorbs the deficiency.
T
F
16. When treasury shares are subsequently re-issued at above cost, the excess is credited to appropriation reserve.
T
F
17. When treasury shares are eventually cancelled and their cost is higher than par or stated value, the deficiency is charged first to share premium corresponding to their original issuances.
T
F
18. When treasury shares are received as donation from shareholders, treasury share account is debited at par or stated value.
T
F
19. Subsequent sale of treasury shares received as donation will increase the total shareholders' equity.
T
F
20. Donation of other corporation's equity share to another company may comprise treasury shares.
T
F
