31 Borrowed P175,000 from Philippine National Bank, giving a 12% mortgage note. lo other transactions occurred during March. Tequired: -Journalize the entries to record the foregoing transactions. -Prepare the shareholders' equity section of the statement of financial position March 31, 2018.
31 Borrowed P175,000 from Philippine National Bank, giving a 12% mortgage note. lo other transactions occurred during March. Tequired: -Journalize the entries to record the foregoing transactions. -Prepare the shareholders' equity section of the statement of financial position March 31, 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Answer in a memorandum entry
Transcribed Image Text:Share Issuances for Cash and Non-Cash Considerations
0n Jan. 1, 2018, the following accounts and their balances appeared in the ledger of
Fuentes Corporation:
Preference P9 Shares, P100 par, 10,000 shares
authorized, 5,000 shares issued
Share Premium-Preference
P 500,000
80,000
Ordinary Shares, P20 par, 100,000 shares authorized,
75,000 shares issued
Share Premium-Ordinary
Retained Earnings
1,500,000
125,000
505,000
At the annual shareholders' meeting on Feb. 11, the board of directors presented a plan
for modernizing and expanding plant operations at a cost of approximately P600,000.
The plan provided (a) that the corporation borrow P175,000, (b) that 1,000 shares of the
unissued preference shares be issued through an underwriter, and (c) that a building
valued at P280,000, and the land on which it is located, valued at P50,000, be acquired
in accordance with preliminary negotiations by the issuance of 15,000 ordinary shares.
The plan was approved by the shareholders and accomplished by the following
transactions:
Issued 15,000 ordinary shares in exchange for land and a building,
according to the plan.
Mar. 3
Issued 1,000 preference shares, receiving P105 per share in cash
from the underwriter.
15
Borrowed P175,000 from Philippine National Bank, giving a 12%
mortgage note.
31
No other transactions occurred during March.
Required:
1. Journalize the entries to record the foregoing transactions.
2. Prepare the shareholders' equity section of the statement of financial position as at
March 31, 2018.
Shot on Y15
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education