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1. On December 1, 2021, Red Corporation exchanged 10,000 ordinary shares held in treasury for a used machine. The treasury shares were acquired by Red at a cost of P40 per share, and are accounted for under the cost method. On the date of the exchange, the ordinary shares had a fair value of P55 per share (the shares were originally issued at P30 per share). As a result of this exchange, Red's total equity will increase by

Group of answer choices

P400,000

P100,000.

P550,000

P150,000

2. Raymond Corporation has 7,500 ordinary shares in its treasury with par value of P100 and cost of P120. The shares were originally issued for P110 per share. The account Share premium Treasury had a balance of P30,000. At the end of 2020, Raymond decided to retire its treasury shares. Which of the following is incorrect?

Group of answer choices

Treasury shares account will be credited by P750,000 upon retirement

Retained earnings will be debited by P45,000 when the treasury shares are retired

Ordinary shares and Share Premium ordinary will be debited by P750,000 and P75,000, respectively, as a result of the retirement of treasury shares

Share premium Treasury will have no balance at the end of the year after the retirement had been recorded

3.

The Rexidel Corporation on November 1 had its Articles of Incorporation approved by the Philippine SEC. It authorized the company to issue 750,000 ordinary shares with P50 par value. On that date, five incorporators subscribed to 262,500 shares at par as follows:

Incorporators Name	No. of Shares Subscribed	Down payment
Oliver	45,000	P600,000
Marvin	60,000	750,000
Jay-ar	45,000	525,000
Raymond	75,000	900,000
Ramir	37,500	450,000

Based on the above information, which of the following is incorrect?

The incorporators total subscription amounted to P13,125,000 which is more than 25% of the total amount of share capital

The company violates the minimum pre-incorporation subscription requirement

The company is compliant with SECs requirements because the amount that should be paid by incorporators above is P2,343,750

The total amount of paid-in capital should be at least P3,281,250

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