Problem 2: Issuance of Shares and SubscriptionReyes Corp. has been authorized to issue 100,000 preference share at P100 parvalue and 200,000 ordinary share at P80 stated value. The followingshareholders' equity transactions during 20x1 follows:a. Issued 10,000 shares for cash of P120 per share.b. Issued 25,000 ordinary share for land with fair value of P2,200,000, the fairvalue of share is P85 per share.c.15,000 preference shares were subscribed at P115 per share.d. Collected P1,500,000 for preference share subscription.e. 50,000 ordinary shares were subscribed for P4,500,000.f. Collected 40% of ordinary share subscriptiong. Collected the balance on the preference share subscription and issuedstock certificates.h. Issued 30,000 ordinary shares for settlement of an outstanding bank loanof P 3,000,000, including accrued interest of P 20,000. On this date, sharesare quoted at P120 per share.i. Net income for the year 1,200,000Required: Prepare the journal entries underA. Memorandum methodB. Journal Entry method

JournalDateAccounts Title and ExplanationDebitCredita.Cash Dr (10,000 x 120)1,200,000Preference…

Answered: Problem 2: Issuance of Shares and…

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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Exercises: 1. The Hillside Corporation has an authorized shares of 250,000 with a par value of Php70. 100,000 shares were originally issued at par and 50,000 shares were subscribed at Php2 above par. During the year, the following transactions occurred: Jan. 5 An additional 30,000 shares were issued at Php75 per share. Feb. 11 2,500 of its own shares were reacquired by the company for Php150,000. Sept. 30 A 10% share dividend was declared by the Board of Directors. Dec. 31 The company realized a profit od Php470,000. Required: Record the foregoing transactions. 2. The shareholders' equity section of Banana Co. revealed the following: Ordinary Shares, Php50 par value, 10,000 shares Premium on Ordinary Shares Retained Earnings Php500,000 20,000 100,000 Required: Record the acquisition and reissuance of treasury shares based on the following: (a) The corporation acquired 2,000 of its own shares at Php50. Reissued 1,000 of these shares. (b) The corporation acquired 2,000 of its own shares…
Memorandum method vs. Journal entry method Horizon Co. was incorporated in 20x1. The following were the transactions: ur 6 Received authorization from the SEC to issue share capital of P3,000,0000 divided into 600,000 shares with par value per share of P5. lan. 6 25% of the authorized capitalization was subscribed at par value and 25% of the total subscription was paid. Lat. 31 Received full payment for 120,000 subscribed shares and issued the related share certificates. Teh. 14 Received cash subscription for 60,000 shares at P20 per share. Share issuance costs of P12,000 were incurred. Feb. 28 Received subscription for 150,000 shares at P25 per share. Requirements: Provide the journal entries under (1) memorandum method and (2) journal entry method. h Prepare the share capital portion of Horizon Co.'s statement of financial position as of February 28, 20x1.
Bandit, Inc., issued for $19 per share 5,000 shares of $10 par value common stock. The entry to record this transaction includes: Select one: a. Increase Cash for 95,000; and increase Common Stock for 95,000 b. Increase Cash for 95,000; increase Common Stock for 50,000 and increase Paid-in Capital in Excess of Par Value for 45,000 c. Increase Cash for 95,000; increase Common Stock for 50,000 and increase Retained Earnings for 45,000 d. Increase Cash for 95,000; increase Common Stock for 50,000 and increase Gain on Sale of Stock for 45,000 e. None of the above
PROBLEM 1: Mr. Queen Company is authorized to issue 80,000 ordinary shares. During the current year, the company issued 25,000 shares. REQUIRED: Prepare the required entry to record the issuance of the ordinary shares under each of the following assumptions: The shares are no-par but have a stated value of P10. The total issue price was P850,000. The shares are no-par and have no stated value. They were issued to a lawyer in exchange for services rendered in connection with the organization of the corporation. The lawyer would normally charge P70,000 for these services. There is no reasonable way to determine 1. 2. the fair market value of the stock.
1. Success Berhad, with a registered capital of 50,000,000 ordinary shares of RM1 each, is open for applications for its first issue of 30,000,000 ordinary shares of RM1 each at RM1.20 on the following terms: On application On allotment On 1st call On 2nd and final call 20 sen 40 sen (including premium) 30 sen 30 sen The application was received for 40,000,000 ordinary shares. The directors rejected applications for 5,000,000 shares and allotted the shares on a pro-rata basis among the remaining applicants. Any surplus money on the application was used to pay upon allotment. All monies due on the allotment and calls on the ordinary shares were duly received. Required: Prepare journal entries to record the above transactions.
Problem 2. Prepare the Shareholders' Equity section of the Statement of Financial Position of New Era Corporation as of December 31,20A. 10% Preference Shares at P50 par value, authorized to issue 10,000 shares and issued 6,000 shares Ordinary Shares at P75 par value, authorized to issue 5,000 shares and issued 4,000 shares of which 100 shares are in the treasury P300,000 300,000 Share Premium: Preference Ordinary Subscribed Preference Share Subscription Receivable – Preference Subscribed Ordinary Share Subscription Receivable - Ordinary Accumulated Profits and Losses 4,000 8,000 100,000 60,000 37,500 10,000 520,000 30,000 8,000 Revaluation Increment on Property Treasury Shares at Cost
17. 4-6 A. BBB Company authorized to issue 37,500 share capital with par value of P100 B. 40% of the authorized share capital was subscribed at par C. Collected 45% of the of the subscription D. Full collection was received on 10,500 shares originally subscribed E. Cash subscription of 4,500 shares at par F. Building with the fair value of P700,000 was acquired upon issuance of 6,750 shares. The market value of the shares at that time was P110. G. Purchased 3,750 treasury shares at P95. H. Reissued 2,250 treasury shares at P98. I. Net income for the year is P1,350,000 J. Issued 20,250 warrants to shareholders, 1 right for each share, permitting the holders to acquire one shar capital of P100 at P105 with every 10 rights submitted. Share are selling at P99 per share at this time. K. Declared property dividend. The property has the fair value of P200,000 at the date of declaration and P185,000 carrying amount L. Received 500 shares donated by a shareholder. The fair value of shares at…
6. Thistle Limited has the following information at 31 December 20X5. • 1,000,000 common shares outstanding with the par value of $0.50. Net income for the year is $1,330,000. Net income attributable to equity holders of the company is $1,230,000. Net income attributable to non-controlling interest of the subsidiaries is $100,000. • Options of 500,000 shares with the exercise price of $3.25 per share. Convertible 10% bonds of $1,000,000 convertible in year 20X6 into 250,000 common shares. Convertible 8% preferred shares of $1 each totaling $1,000,000 convertible in year 20X7 at 1 common share for every 40 preferred shares. • Tax rate is 40%. Year-end market price per common share is $4.25. Average market price per common share is $4. a. Calculate basic earnings per share. b. Calculate diluted earnings per share by applying the procedure and sequential steps in the lecture note.
Item No. 3 is based on the following information: Howing led Leon Corporation sold 500 shares of its P 40 par value preference shares for cash at P 50 per share. 3. In recording this transaction, there would be a: 23510HD 3 a. Credit to Preference Share Capital for P 20,000. b. Credit to Preference Share Capital for P 25,000. open no bsand 21 I.oM matt Credit to Preference Share Capital in Excess of Stated Value for P 5,000. C. d. Credit to Subscribed Preference Share Capital for P 20,000.
Item No. 5 is based on the following information: and no bezod ei S.oM mat 003. 16 Mario Mario Corporation received subscriptions for 400 ordinary shares with a par value of P 20 per share. The subscription price was P 23 per share. 5. What would be the increase in the Subscribed Ordinary Share Capital and Ordinary Share Premium accounts, respectively, as a result of the foregoing transaction? a. PO and P 1,200. b. PO and P 9,200. c. P 8,000 and P 1,200. 219 d. P 9,200 and P O. reflected in the
PROBLEM 32: CYPRUS COMPANY began operation on January 1. Authorized were 20,000 shares of P10 par value ordinary shares and 40,000 shares of 10%, P 100 par value preference shares. The following transactions involving shareholders' equity occurred during the first year of operations. January 1 February 23 March 10 April 10 July 14 August 3 December 1 Issued 500 ordinary shares to the corporation promoters in exchange for property valued at P170,000 and services valued at P70,000. The property had cost the promoters P90,000 3 years before and was carried on the promoters' books at P50,000. 31 Issued 10,000 preference shares with a par value of P100 per share. The shares were issued at a price of P150 per share, and the company paid P75,000 to an agent for selling the shares. Sold 3,000 ordinary shares for P390 per share. Issue costs were P25,000 Cordillera Career Development College COLLEGE OF BUSINESS EDUCATION AND ADMINISTRATION Buyagan, Poblacion, La Trinidad, Benguet 4,000 ordinary…
A, B, C, D and E organizec BUmp Company at the beginning of the current year with an authorized share capital of P5,000,000 consisting of 50,000 shares of P100 par value. On January 1 subscriptionss were taken from A for 12,000 shares, from B for 13,000 shares from C for 8,000 shares, from D for 4,000 shares and from E for 3,000 shares, all at par. A transferred to the corporation in partial payment of the subscription the following assets and liabilities: Accounts receivable 350,000 Notes receivable 70,000 Inventory 680,000 Accounts payable 100,000 B transferred the following assets to the corporation in partial payment of the subscription: Land 150,000 Building 850,000 The remaining incorporators paid 25% of their subscriptions. The corporation received a bill on Jnaury 10 in the amount of P50,000…

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