Use the following information in answering the next item(s): FORGIVENESS INC. is authorized to issue 400,000 of P10 par value ordinary shares and 300,000 of P15 par value preference shares. The company has the following transactions: a) Issued 30,000 ordinary shares at P20 per share; received cash. b) Issued 50,000 ordinary shares in exchange for a building valued at P900,000 and land valued at P300,000. (The building was originally acquired by the investor for P750,000 and has P250,000 of accumulated depreciation; the land was originally acquired for P90,000.) 20,000 ordinary shares were sold under share subscriptions at P12 per share. c) Exchanged 30,000 ordinary and 10,000 preference shares for a building with a fair value of P600,000. The fair value of the ordinary and preferred shares as of that date is P20 and P30, respectively. e) Issued 5,000 ordinary shares and 2,000 preference shares for a lump-sum price of P120,000. At that date, the fair value of the preference shares cannot be determined while the fair value of the ordinary shares is P15 per share. f) Issued 800 preferred shares, selling at P25 per share, to lawyers for services in connection with the organization of the corporation. The fair value of the legal services was P15,000. Issue cost is P3,500.
Use the following information in answering the next item(s): FORGIVENESS INC. is authorized to issue 400,000 of P10 par value ordinary shares and 300,000 of P15 par value preference shares. The company has the following transactions: a) Issued 30,000 ordinary shares at P20 per share; received cash. b) Issued 50,000 ordinary shares in exchange for a building valued at P900,000 and land valued at P300,000. (The building was originally acquired by the investor for P750,000 and has P250,000 of accumulated depreciation; the land was originally acquired for P90,000.) 20,000 ordinary shares were sold under share subscriptions at P12 per share. c) Exchanged 30,000 ordinary and 10,000 preference shares for a building with a fair value of P600,000. The fair value of the ordinary and preferred shares as of that date is P20 and P30, respectively. e) Issued 5,000 ordinary shares and 2,000 preference shares for a lump-sum price of P120,000. At that date, the fair value of the preference shares cannot be determined while the fair value of the ordinary shares is P15 per share. f) Issued 800 preferred shares, selling at P25 per share, to lawyers for services in connection with the organization of the corporation. The fair value of the legal services was P15,000. Issue cost is P3,500.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter20: Corporations: Organization And Capital Stock
Section: Chapter Questions
Problem 1CP: Prepare general journal entries for the following transactions, identifying each transaction by...
Related questions
Question
What is the balance of the ordinary share premium after considering the above transactions?
2. What is the balance of the
Transcribed Image Text:Use the following information in answering the next item(s):
FORGIVENESS INC. is authorized to issue 400,000 of P10 par value ordinary shares and
300,000 of P15 par value preference shares. The company has the following
transactions:
a)
Issued 30,000 ordinary shares at P20 per share; received cash.
Issued 50,000 ordinary shares in exchange for a building valued at P900,000 and
b)
land valued at P300,000. (The building was originally acquired by the investor for
P750,000 and has P250,000 of accumulated depreciation; the land was originally
acquired for P90,000.)
20,000 ordinary shares were sold under share subscriptions at P12 per share.
d)
Exchanged 30,000 ordinary and 10,000 preference shares for a building with a fair
value of P600,000. The fair value of the ordinary and preferred shares as of that
date is P20 and P30, respectively.
Issued 5,000 ordinary shares and 2,000 preference shares for a lump-sum price
e)
of P120,000. At that date, the fair value of the preference shares cannot be
determined while the fair value of the ordinary shares is P15 per share.
Issued 800 preferred shares, selling at P25 per share, to lawyers for services in
f)
connection with the organization of the corporation. The fair value of the legal
services was P15,000. Issue cost is P3,500.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning