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MAKE T-ACCOUNT for the following: Ordinary shares Preference shares Share premium- Ordinary shares Share premium- Preference shares Share premium- Treasury shares Total additional paid-in capital Total contributed capital Total stockholders’ equity

MAKE T-ACCOUNT for the following: Ordinary shares Preference shares Share premium- Ordinary shares Share premium- Preference shares Share premium- Treasury shares Total additional paid-in capital Total contributed capital Total stockholders’ equity

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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MAKE T-ACCOUNT for the following:

  1. Ordinary shares 
  2. Preference shares 
  3. Share premium- Ordinary shares 
  4. Share premium- Preference shares 
  5. Share premium- Treasury shares 
  6. Total additional paid-in capital 
  7. Total contributed capital 
  8. Total stockholders’ equity 
PROBLEM 1: You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December31, 2019. Glory Corp. was incorporated in early 2018 when it was authorized by SEC to issue 500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The following schedule reflects the company's capital balances as of December 31, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at PS0 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 P1,400,000 2,500,000 540,000 Total shareholders' equity P3.440.000
Transcribed Image Text:PROBLEM 1: You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December31, 2019. Glory Corp. was incorporated in early 2018 when it was authorized by SEC to issue 500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The following schedule reflects the company's capital balances as of December 31, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at PS0 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 P1,400,000 2,500,000 540,000 Total shareholders' equity P3.440.000
Glory Inc. Journal Entries Date Accounts Title Debit Credit Jan 15 Treasury Shares 440,000 Cash 440,000 (To record purchase of treasury shares) Feb 11 Cash 112,000 Share Premium - Treasury 24,000 Treasury Shares 88,000 (To record reissuance of treasury shares) Mar 5 Cash 114,000 Share Premium - Treasury Treasury Shares 18,000 132,000 (To record reissuance of treasury shares) Apr 1 Ordinary Shares 50,000 Share Premium - Treasury Retained Earnings Treasury Shares 6,000 54,000 110,000 (To record retirement of shares) May 12 Preference Shares 400,000 Ordinary Shares Share Premium - Ordinary Shares 100,000 300,000 (To record conversion of preference into ordinary shares) Jun 9 Cash 175,000 Ordinary Shares Share Premium - Ordinary Shares 150,000 25,000 (To record shares subscribed) Jul 4 No Entry Jul 4 Cash 24,000 Retained Earnings Treasury Shares (To record reissuance of treasury stock) 42,000 66,000 i. Cash 44,000 Ordinary Shares Share Premium - Ordinary Shares (To record issuance of ordinary shares) 40,000 4,000 j. Income Summary 830,000 Retained Earnings 830,000 (To record profit transferred to retained earnings)
Transcribed Image Text:Glory Inc. Journal Entries Date Accounts Title Debit Credit Jan 15 Treasury Shares 440,000 Cash 440,000 (To record purchase of treasury shares) Feb 11 Cash 112,000 Share Premium - Treasury 24,000 Treasury Shares 88,000 (To record reissuance of treasury shares) Mar 5 Cash 114,000 Share Premium - Treasury Treasury Shares 18,000 132,000 (To record reissuance of treasury shares) Apr 1 Ordinary Shares 50,000 Share Premium - Treasury Retained Earnings Treasury Shares 6,000 54,000 110,000 (To record retirement of shares) May 12 Preference Shares 400,000 Ordinary Shares Share Premium - Ordinary Shares 100,000 300,000 (To record conversion of preference into ordinary shares) Jun 9 Cash 175,000 Ordinary Shares Share Premium - Ordinary Shares 150,000 25,000 (To record shares subscribed) Jul 4 No Entry Jul 4 Cash 24,000 Retained Earnings Treasury Shares (To record reissuance of treasury stock) 42,000 66,000 i. Cash 44,000 Ordinary Shares Share Premium - Ordinary Shares (To record issuance of ordinary shares) 40,000 4,000 j. Income Summary 830,000 Retained Earnings 830,000 (To record profit transferred to retained earnings)
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