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At the shares of 10% P100 par value. operations and was authorized to issue 100,000 ord shares of P100 par value and 50,000 convertible prefe The following transactions involving shareholders' ec ullhouse Company b mod during the first vear of

At the shares of 10% P100 par value. operations and was authorized to issue 100,000 ord shares of P100 par value and 50,000 convertible prefe The following transactions involving shareholders' ec ullhouse Company b mod during the first vear of

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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shares of 10% P100 par value. shares of P100 par value and 50,000 convertible preference At the beginning of current year, Fullhouse Company began occurred during the first year of operations: The following transactions involving shareholders' equity operations and was authorized to issue 100,000 ordinary value. 1 Issued 10,000 ordinary shares to the promoters in exchange for land valued at P2,500,000 and services valued at P500,000. Jan. The property had cost the promoters P1,800,000 three years before and was carried on the promoters' books at P1,500,000. Feb. 20 Issued 15,000 preference shares for P120 per share. Each share can be converted to five ordinary shares. The entity paid P50,000 to an agent for selling the shares. Mar. 10 Sold 25,000 ordinary shares for P260 per share. Issue costs amounted to P200,000. 1 Sold 20,000 ordinary shares under share subscriptions at P350 per share. Apr. No share certificates are issued until a subscription contract is paid in full. No cash was received.
Transcribed Image Text:shares of 10% P100 par value. shares of P100 par value and 50,000 convertible preference At the beginning of current year, Fullhouse Company began occurred during the first year of operations: The following transactions involving shareholders' equity operations and was authorized to issue 100,000 ordinary value. 1 Issued 10,000 ordinary shares to the promoters in exchange for land valued at P2,500,000 and services valued at P500,000. Jan. The property had cost the promoters P1,800,000 three years before and was carried on the promoters' books at P1,500,000. Feb. 20 Issued 15,000 preference shares for P120 per share. Each share can be converted to five ordinary shares. The entity paid P50,000 to an agent for selling the shares. Mar. 10 Sold 25,000 ordinary shares for P260 per share. Issue costs amounted to P200,000. 1 Sold 20,000 ordinary shares under share subscriptions at P350 per share. Apr. No share certificates are issued until a subscription contract is paid in full. No cash was received.
preference shares for a building with a fair value The amount still due on those contracts was notice from holders of share subscriptions for 5,000 shares that they would not P6,500,000 by the owner and has a carrying amount Share certificates were issued for the subscriptions pay further on the subscriptions because the price The building was originally purchased for In addition, 10,000 ordinary shares were sold for subscriptions and partial payments on the rest of the subscriptions. Total cash received was 1 Received payments in full for half of the share July 15 Exchanged 12,000 ordinary shares and 20,000 of P7,000,000. The building was originally purchased fo * of P4,800,000. In addition, 10,000 ordinary shares were sold s. P3,000,000 cash on same date. Aug. 1 subscriptions and partial payments on the rest the subscriptions. Total cash received P4,500,000. Share certificates were issued for the subscription paid in full. from holders of share Aug. 31 Received notice of the share had fallen to P190 per share. P1,500,000. Amounts previously paid on the contracts are forfeited according to the agreement. Dec. 31 Net income for the first year of operations was P3,000,000. Instructions: 1. Prepare journal entries to record the transactions. 2. Present the shareholders' equity on December 31.
Transcribed Image Text:preference shares for a building with a fair value The amount still due on those contracts was notice from holders of share subscriptions for 5,000 shares that they would not P6,500,000 by the owner and has a carrying amount Share certificates were issued for the subscriptions pay further on the subscriptions because the price The building was originally purchased for In addition, 10,000 ordinary shares were sold for subscriptions and partial payments on the rest of the subscriptions. Total cash received was 1 Received payments in full for half of the share July 15 Exchanged 12,000 ordinary shares and 20,000 of P7,000,000. The building was originally purchased fo * of P4,800,000. In addition, 10,000 ordinary shares were sold s. P3,000,000 cash on same date. Aug. 1 subscriptions and partial payments on the rest the subscriptions. Total cash received P4,500,000. Share certificates were issued for the subscription paid in full. from holders of share Aug. 31 Received notice of the share had fallen to P190 per share. P1,500,000. Amounts previously paid on the contracts are forfeited according to the agreement. Dec. 31 Net income for the first year of operations was P3,000,000. Instructions: 1. Prepare journal entries to record the transactions. 2. Present the shareholders' equity on December 31.
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