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XINTACCTG1 REVIEWER FOR SHAREHOLDERS EQUITY Part 1
XINTACCTG1 REVIEWER FOR SHAREHOLDERS EQUITY Part 1
1) Authorization “Authorized to issue ____ shares of _____ share Unissued ____ Share Capital XXX
of Share Capital capital with a par value of P____” Authorized ____ Share Capital XXX
(Authorized shares __ Par value)
Upon issuance of the stock, Share Capital or Unissued Share Capital is credited at par value. The excess of the value assigned to the
asset received over the par value of the stock issued is credited to Share Premium or Additional Paid-in Capital or Share Capital in
Excess of Par.
Order of Priority:
1) Fair Value of Non-cash asset
2) Fair Value of Shares issued
3) Par Value of Shares issued
Issuance in Exchange for Service Rendered
The services received is recorded at its fair value
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Subscription Defaults
a. Upon Default
Receivable from Highest Bidder XXX Other term for RFHB is “Due
Subscription Receivable XXX from Highest Bidder”
b. Costs incurred in connection with the delinquency sale
Receivable from Highest Bidder XXX
Cash XXX
c. Upon receipt of payment from Highest bidder
Cash XXX
Receivable from Highest Bidder XXX
d. Upon issuance of certificates of stock
Subscribed Share Capital XXX
Share Capital (or Unissued SC) XXX
All subscribed shares are issued. Shares are first given to the highest bidder. The excess, if any, are given to the
defaulting subscriber.
If there is no bidder, all of the delinquent shares will be issued to the name of the corporation. Such shares are
considered Treasury shares and the ff. entries will be made, after making the entries (a) and (b).
If the dividends declared are still unpaid as of the statement of financial position date, the balance of the
account Cash Dividends Payable is reported as current liability.
Cash dividends may either be:
1. Peso dividend- expressed in peso amount
2. Percentage dividend- expressed in percentage.
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Donated Capital
Donation is in the form of shares
a. Receipt of donated shares by a shareholder
“Memorandum entry”
1. Purchase of Treasury Shares (COST METHOD) Treasury share is recorded at cost regardless of
Treasury Shares XXX whether the share is acquired below or above par
Cash XXX or stated value
b. Above Cost
Cash XXX
Treasury Share XXX 2. The excess of the cost over reissue should be
Share Premium1- T/S XXX debited to share premium- treasury share to the
extent of its balance. In the absence of any balance
c. Below Cost in this account, the loss is debited to Retained
Cash XXX Earnings.
Share Premium- T/S 2 (if any) XXX
Retained Earnings XXX
Treasury Share XXX
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