Shareholders' Equity: Transactions and Statement The shareholders' equity section of L. Generales Corporation at Dec. 31, 2017, follows: Ordinary Shares, P10 par, 100,000 shares authorized, 25,000 shares issued, 4,000 shares are in the treasury Share Premium Share Premium-Treasury Retained Earnings P250,000 325,000 12,000 198,000 P785,000 Total Less: Treasury Stock, 4,000 shares at cost Total Shareholders' Equity 100,000 P685,000 Note: A portion of retained earnings is restricted due to the purchase of treasury stock. The following transactions affecting shareholders' equity occurred during 2018: Jan. 8 Issued 10,000 shares of previously unissued ordinary shares for P26 cash per share. Sold all of the treasury shares for P27 cash per share. Declared a 6% share dividend on all outstanding ordinary shares. The market value of the share was P30 per share. Mar. 12 June 30 July 10 Oct. 7 Issued the share dividend declared on June 30. Acquired 1,100 ordinary shares for the treasury at P28 per share. Declared a cash dividend of P2.00 per outstanding ordinary share, Dec. 18 payable on Jan. 9 to shareholders of record on Dec. 31. Closed the income summary account, with profit of P183,000 to retained earnings. Closed the dividend accounts to retained earnings. 31 31 Required: 1. Prepare journal entries to record the foregoing transactions. 2. Prepare the statement of changes in shareholders' equity for 2018.
Shareholders' Equity: Transactions and Statement The shareholders' equity section of L. Generales Corporation at Dec. 31, 2017, follows: Ordinary Shares, P10 par, 100,000 shares authorized, 25,000 shares issued, 4,000 shares are in the treasury Share Premium Share Premium-Treasury Retained Earnings P250,000 325,000 12,000 198,000 P785,000 Total Less: Treasury Stock, 4,000 shares at cost Total Shareholders' Equity 100,000 P685,000 Note: A portion of retained earnings is restricted due to the purchase of treasury stock. The following transactions affecting shareholders' equity occurred during 2018: Jan. 8 Issued 10,000 shares of previously unissued ordinary shares for P26 cash per share. Sold all of the treasury shares for P27 cash per share. Declared a 6% share dividend on all outstanding ordinary shares. The market value of the share was P30 per share. Mar. 12 June 30 July 10 Oct. 7 Issued the share dividend declared on June 30. Acquired 1,100 ordinary shares for the treasury at P28 per share. Declared a cash dividend of P2.00 per outstanding ordinary share, Dec. 18 payable on Jan. 9 to shareholders of record on Dec. 31. Closed the income summary account, with profit of P183,000 to retained earnings. Closed the dividend accounts to retained earnings. 31 31 Required: 1. Prepare journal entries to record the foregoing transactions. 2. Prepare the statement of changes in shareholders' equity for 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Shareholders' Equity: Transactions and Statement
The shareholders' equity section of L. Generales Corporation at Dec. 31, 2017, follows:
Ordinary Shares, P10 par, 100,000 shares authorized, 25,000
shares issued, 4,000 shares are in the treasury
Share Premium
Share Premium-Treasury
Retained Earnings
P250,000
325,000
12,000
198,000
P785,000
Total
Less: Treasury Stock, 4,000 shares at cost
Total Shareholders' Equity
100,000
P685,000
Note: A portion of retained earnings is restricted due to the purchase of treasury stock.
The following transactions affecting shareholders' equity occurred during 2018:
Jan. 8
Issued 10,000 shares of previously unissued ordinary shares for P26 cash
per share.
Sold all of the treasury shares for P27 cash per share.
Declared a 6% share dividend on all outstanding ordinary shares. The
market value of the share was P30 per share.
Mar. 12
June 30
July 10
Oct. 7
Issued the share dividend declared on June 30.
Acquired 1,100 ordinary shares for the treasury at P28 per share.
Declared a cash dividend of P2.00 per outstanding ordinary share,
payable on Jan. 9 to shareholders of record on Dec. 31.
Closed the income summary account, with profit of P183,000 to
Dec. 18
31
retained earnings.
Closed the dividend accounts to retained earnings.
31
Required:
1. Prepare journal entries to record the foregoing transactions.
2. Prepare the statement of changes in shareholders' equity for 2018.
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