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Sorima Corporation began operations on Jan. 1, 2018. The following transactic lating to shareholders' equity occurred in the first two years of the corporatian perations: 2018 Authorized the issuance of 2 million shares of P5 par value ordinary shares and 100,000 shares of P100 par value, 10% cumulative preference shares. Issued 200,000 shares of ordinary shares for P12 cash per share. Issued 100,000 shares of ordinary shares in exchange for a building valued at P820,000 and merchandise inventory valued at P380,000. Paid P10,000 cash to the corporation's founders for organization activities. Jan. 1 Jan. 2 Jan. 3 Jan. 4

Sorima Corporation began operations on Jan. 1, 2018. The following transactic lating to shareholders' equity occurred in the first two years of the corporatian perations: 2018 Authorized the issuance of 2 million shares of P5 par value ordinary shares and 100,000 shares of P100 par value, 10% cumulative preference shares. Issued 200,000 shares of ordinary shares for P12 cash per share. Issued 100,000 shares of ordinary shares in exchange for a building valued at P820,000 and merchandise inventory valued at P380,000. Paid P10,000 cash to the corporation's founders for organization activities. Jan. 1 Jan. 2 Jan. 3 Jan. 4

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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Issuance of Shares A Sorima Corporation began operations on Jan. 1, 2018. The following transactions relating to shareholders' equity occurred in the first two years of the corporation's operations: 2018 Jan. 1 Authorized the issuance of 2 million shares of P5 par value ordinary shares and 100,000 shares of P100 par value, 10% cumulative preference shares. Jan. 2 Issued 200,000 shares of ordinary shares for P12 cash per share. Jan. 3 Issued 100,000 shares of ordinary shares in exchange for a building valued at P820,000 and merchandise inventory valued at P380,000. Jan. 4 Paid P10,000 cash to the corporation's founders for organization activities. Jan. 5 Issued 12,000 shares of preference shares for P110 cash per share. 2019 June 4 Issued 100,000 shares of ordinary shares for P15 cash per share. Required: 1. Prepare the journal entries to record these transactions. 2. Prepare the share capital section of the shareholders' equity as at Dec. 31, 2018 and Dec. 31, 2019. 3. Prepare a table showing dividend allocations and dividends per share for 2018 and 2019 assuming the corporation declared the following cash dividends: 2018, P50,000, and 2019, P300,000. Accomplish this requirement after studying Chapter 7. 4. Prepare the Jan. 2, 2018 journal entry for the issuance of 200,000 ordinary shares for P12 cash per share assuming: a. Ordinary shares is no-par without a stated value. b. Ordinary shares with a stated value of P10 per share. no-par
Transcribed Image Text:Issuance of Shares A Sorima Corporation began operations on Jan. 1, 2018. The following transactions relating to shareholders' equity occurred in the first two years of the corporation's operations: 2018 Jan. 1 Authorized the issuance of 2 million shares of P5 par value ordinary shares and 100,000 shares of P100 par value, 10% cumulative preference shares. Jan. 2 Issued 200,000 shares of ordinary shares for P12 cash per share. Jan. 3 Issued 100,000 shares of ordinary shares in exchange for a building valued at P820,000 and merchandise inventory valued at P380,000. Jan. 4 Paid P10,000 cash to the corporation's founders for organization activities. Jan. 5 Issued 12,000 shares of preference shares for P110 cash per share. 2019 June 4 Issued 100,000 shares of ordinary shares for P15 cash per share. Required: 1. Prepare the journal entries to record these transactions. 2. Prepare the share capital section of the shareholders' equity as at Dec. 31, 2018 and Dec. 31, 2019. 3. Prepare a table showing dividend allocations and dividends per share for 2018 and 2019 assuming the corporation declared the following cash dividends: 2018, P50,000, and 2019, P300,000. Accomplish this requirement after studying Chapter 7. 4. Prepare the Jan. 2, 2018 journal entry for the issuance of 200,000 ordinary shares for P12 cash per share assuming: a. Ordinary shares is no-par without a stated value. b. Ordinary shares with a stated value of P10 per share. no-par
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