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Requirements: a. Give the entries to record the foregoing transactions using memorandum entry method. b. What amount would be total receivable from the highest bidder? c. How many shares will be given to Mr. X?

Requirements: a. Give the entries to record the foregoing transactions using memorandum entry method. b. What amount would be total receivable from the highest bidder? c. How many shares will be given to Mr. X?

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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Transaction 1: ABC Corp sold 100 shares of ordinary share capital, P10 par on subscription basis to Mr. X at P15 per share. Mr. X paid a 30% down payment. Transaction 2: After a month, Mr. X paid another 40% of the subscription balance. Transaction 3: Mr. X failed to pay his balance and was declared delinquent and his delinquent shares were offered for sale at a public auction. Transaction 4: The cost of selling his delinquent shares amounted to P850 and this is paid by the corporation. Transaction 5: There are 3 bidders who are willing to pay the remaining balance of subscription and all expenses related to the delinquent shares and are willing to get the number of shares as follow: Mr. E - 50 shares Mr. F - 45 shares Mr. G-55 shares The amount due was collected from the highest bidder and the corporation issued the stock certificates. In the sale of the delinquent shares, the 100 delinquent shares will be divided between the delinquent subscriber for 55 shares and for the highest bidder, 45 shares. Therefore 2 stock certificates will be issued. Requirements: a. Give the entries to record the foregoing transactions using memorandum entry method. b. What amount would be total receivable from the highest bidder? c. How many shares will be given to Mr. X?
Transcribed Image Text:Transaction 1: ABC Corp sold 100 shares of ordinary share capital, P10 par on subscription basis to Mr. X at P15 per share. Mr. X paid a 30% down payment. Transaction 2: After a month, Mr. X paid another 40% of the subscription balance. Transaction 3: Mr. X failed to pay his balance and was declared delinquent and his delinquent shares were offered for sale at a public auction. Transaction 4: The cost of selling his delinquent shares amounted to P850 and this is paid by the corporation. Transaction 5: There are 3 bidders who are willing to pay the remaining balance of subscription and all expenses related to the delinquent shares and are willing to get the number of shares as follow: Mr. E - 50 shares Mr. F - 45 shares Mr. G-55 shares The amount due was collected from the highest bidder and the corporation issued the stock certificates. In the sale of the delinquent shares, the 100 delinquent shares will be divided between the delinquent subscriber for 55 shares and for the highest bidder, 45 shares. Therefore 2 stock certificates will be issued. Requirements: a. Give the entries to record the foregoing transactions using memorandum entry method. b. What amount would be total receivable from the highest bidder? c. How many shares will be given to Mr. X?
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