Answered: Prepare the journal entries using…

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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Question

Happy Food Corporation was authorized to issue 500,000 shares of stock with a par value of P40. The following initial transactions took place during March:

1 Pre-incorporation subscription at the par value by the following incorporators:

Shares Payment

Jolly 20,000 P500,000

Burgee 20,000 P200,000

Wendy 25,000 275,000

King 25,000 300,000

Shake IT 20,000 300,000

Domini 25,000 250,000

5 - Issued 30,000 shares to McDo for Land costing P1,500,000 but with a market value of P1,750,000

10- Sold for cash, 10,000 shares at P55 per share to Tia Maria

15- Jolly and King paid 50% of their subscription balance

25- King paid for his subscription balance and was issued a stock certificate

28- Starbox subscribed to 20,000 shares at 120% of the par value and paid 25%

29- Starbox paid his subscription balance in the form of merchandise and was issued stock certificate

30- King notified the corporation of the sale of 10,000 shares to Heaven for P750,000 Stock Certificate was properly endorsed ans surrendered to the corporate secretary . The certificate was cancelled and two new certificates were issued to: King for 15,000 shares and Henwa for 10,000 shares.

Required:

Prepare the journal entries using Memorandum Entry method

Compute for the following balance:

Share Capital

Subscribed Share Capital

Additional Paid In Capital

Subscription Receivable

Legal Capita

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