Blue Company began its operations on January 1. Authorized were 20,000 shares of Php 10 par value ordinary shares and 40,000 shares of 10%, Php 100 par value preference shares. The following transactions involving shareholders’ equity occurred during the first year of operations: Jan 1 – Issued 500 ordinary shares to the corporation promoters in exchange for property valued at Php 170,000 and services valued at Php 70,000. The property had cost the promotion Php 90,000 3 years before and was carried on the promoter’s books at Php 50,000. Feb 23 – Issued Php 10,000 preference shares with a par value of Php 100 per share. The shares were issued at a price of Php 150 per share and the company paid Php 75,000 to an agent for selling the shares. Mar 10 – Sold 3,000 ordinary shares for Php 390 per share. Issue costs were Php 25,000. Apr 10 – 4,000 ordinary shares were sold under share subscriptions at Php 450 per share. No shares are issued until a subscription contract is paid in full. No cash was received. Jul 14 – Exchanged 700 ordinary shares and 1,400 preference shares for a building with a fair market value of Php 510,000. The building was originally purchased for Php 380,000 by the investors and has a book value of Php 220,000. In addition, 600 ordinary shares were sold for Php 240,000 in cash. Aug 3 – Received payments in full for half of the share subscriptions and payments on account on the rest of the subscriptions. Total cash received was Php 1,400,000. Shares were issued for the subscriptions paid in full. Dec 1 – Declared a cash dividend of Php 10 per share on preference shares, payable on December 31 to shareholders of record on December 15, and a Php 20 per share cash dividend on ordinary shares, payable January 5 of the following year to shareholders of record on December 15. Dec 31 – Paid the dividends to the preference shareholders. Net income for the first year of operations was Php 600,000. Calculate the balances of each of the following accounts Preference shares Ordinary shares Share premium Cash Dividends Retained Earnings
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Blue Company began its operations on January 1. Authorized were 20,000 shares of Php 10 par value ordinary shares and 40,000 shares of 10%, Php 100 par value Jan 1 – Issued 500 ordinary shares to the corporation promoters in exchange for property valued at Php 170,000 and services valued at Php 70,000. The property had cost the promotion Php 90,000 3 years before and was carried on the promoter’s books at Php 50,000. Feb 23 – Issued Php 10,000 preference shares with a par value of Php 100 per share. The shares were issued at a price of Php 150 per share and the company paid Php 75,000 to an agent for selling the shares. Mar 10 – Sold 3,000 ordinary shares for Php 390 per share. Issue costs were Php 25,000. Apr 10 – 4,000 ordinary shares were sold under share subscriptions at Php 450 per share. No shares are issued until a subscription contract is paid in full. No cash was received. Jul 14 – Exchanged 700 ordinary shares and 1,400 preference shares for a building with a fair market value of Php 510,000. The building was originally purchased for Php 380,000 by the investors and has a book value of Php 220,000. In addition, 600 ordinary shares were sold for Php 240,000 in cash. Aug 3 – Received payments in full for half of the share subscriptions and payments on account on the rest of the subscriptions. Total cash received was Php 1,400,000. Shares were issued for the subscriptions paid in full. Dec 1 – Declared a cash dividend of Php 10 per share on preference shares, payable on December 31 to shareholders of record on December 15, and a Php 20 per share cash dividend on ordinary shares, payable January 5 of the following year to shareholders of record on December 15. Dec 31 – Paid the dividends to the preference shareholders. Net income for the first year of operations was Php 600,000. Calculate the balances of each of the following accounts
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