An entity was organized at the beginning of the current year and was authorized to issue share capital of 200,000 ordinary shares with par value of ₱20. The following transactions occurred during the year: • Received subscriptions at par value from incorporators equal to 45% of the authorized share capital • Received 60% down payment on the subscriptions from the incorporators • Received full payment on 50,000 shares originally subscribed • An equipment was acquired by issuing 5,000 shares. Share are currently traded at this time at ₱25/share. • Received cash subscriptions to 10,000 shares at ₱28/share • Partially collected 50% of the amount subscribed on the latest subscriptions. • Collected in full 90% of the latest subscription. 10% defaulted, thus the corporation offered the shares on a public auction and awarded it to the highest bidder who paid the delinquency balance and the incurred ₱5,000 auction expense. • Net income for the year-ended was ₱800,000. Requirements: A. Prepare all necessary journal entries for the current year. B. Compute for the following: 1. How much did the highest bidder pay the corporation? 2. What is the balance of the subscriptions receivable at year-end? 3. What is the balance of the share capital as of year-end? 4. What is the balance of the subscribed share capital at year-end, assuming the subscriptions receivable is current? 5. What is the balance of share premium at year-end? 6. How much is the corporation’s legal capital? 7. How much is the total shareholders’ equity at year-end?
An entity was organized at the beginning of the current year and was authorized to issue share
capital of 200,000 ordinary shares with par value of ₱20. The following transactions occurred during
the year:
• Received subscriptions at par value from incorporators equal to 45% of the authorized share
capital
• Received 60% down payment on the subscriptions from the incorporators
• Received full payment on 50,000 shares originally subscribed
• An equipment was acquired by issuing 5,000 shares. Share are currently traded at this time
at ₱25/share.
• Received cash subscriptions to 10,000 shares at ₱28/share
• Partially collected 50% of the amount subscribed on the latest subscriptions.
• Collected in full 90% of the latest subscription. 10% defaulted, thus the corporation offered the
shares on a public auction and awarded it to the highest bidder who paid the delinquency
balance and the incurred ₱5,000 auction expense.
• Net income for the year-ended was ₱800,000.
Requirements:
A. Prepare all necessary
B. Compute for the following:
1. How much did the highest bidder pay the corporation?
2. What is the balance of the subscriptions receivable at year-end?
3. What is the balance of the share capital as of year-end?
4. What is the balance of the subscribed share capital at year-end, assuming the subscriptions
receivable is current?
5. What is the balance of share premium at year-end?
6. How much is the corporation’s legal capital?
7. How much is the total shareholders’ equity at year-end?
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