Highest Bidder and Offer Price in Delinquent Share Subscription
17 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What does the term 'highest bidder' refer to in the context of delinquent shares?

  • The bidder willing to pay the most for the shares
  • The bidder willing to receive the smallest number of shares (correct)
  • The bidder willing to cover all the expenses incurred in the public auction
  • The bidder willing to subscribe to additional shares at a premium

    • What is typically included in the offer price for delinquent shares in a public auction?

  • Current market value of the shares
  • Cost of advertising the auction
  • Accrued interest on delinquent shares
  • Unpaid balance due on subscription (correct)

    • Based on the information provided, what was the total cost incurred for auctioning Mr. Ronald's delinquent shares?

  • P280,000
  • P300,000
  • P50,000
  • P20,000 (correct)

    • How many shares did Twirlie express willingness to receive in the auction?

    <p>3,500</p> Signup and view all the answers

    Which bidder is NOT mentioned as willing to pay the offer price for the delinquent shares?

    <p>Ronald</p> Signup and view all the answers

    What is required for an individual to be considered the highest bidder in a public auction for delinquent shares?

    <p>Willingness to receive the largest number of shares</p> Signup and view all the answers

    What is the total number of shares subscribed to in this case?

    <p>5,000</p> Signup and view all the answers

    What are the journal entries made to record the expenses on the public auction?

    <p>Advances on share delinquency sale 20,000, Cash 20,000</p> Signup and view all the answers

    Who is left with the remaining shares for the delinquent subscriber?

    <p>Ronald</p> Signup and view all the answers

    How many shares did Champ bid for in this scenario?

    <p>3,000</p> Signup and view all the answers

    In which account should the 'advances on share delinquency sale' be treated before payment from the highest bidder?

    <p>Current asset</p> Signup and view all the answers

    What is the amount fully paid by 80% of the original subscribers for the share subscriptions?

    <p>P150,000</p> Signup and view all the answers

    Why is the down payment multiplied by 80% in the computation?

    <p>Because only 80% of the original subscribers have fully paid their share subscriptions</p> Signup and view all the answers

    What account is credited with the excess amount over par value when shares are issued at P120 per share?

    <p>Share premium</p> Signup and view all the answers

    What happens if a share subscriber fails to pay their unpaid share subscription by the due date set by the board of directors?

    <p>They are declared a delinquent subscriber</p> Signup and view all the answers

    What action may be taken with delinquent shares?

    <p>They may be sold at public auction to the highest bidder</p> Signup and view all the answers

    Why do bidders participate in the public auction of delinquent shares?

    <p>To acquire shares at a potentially discounted price</p> Signup and view all the answers

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser