SHARE HOLDERS EQUITY

MEMO Method: The corporation was authorized to issue share capital of P_______ divided in ________
shares with par value of P ______ .

Entry method ; Dr. Unissued Share Capital

Cr. Authorized Share Capital

Entries:

1. To record Subscribed Authorized Shares (25%) If Paying:

Dr. Subscription Receivable Dr. Cash
Cr. Subscribed Share Capital Cr. Subscription Receivable
2. To record Issuance of Share certificate ( If Fully Paid)
Dr. Subscribed Share Capital
Cr. Share Capital IF: Entry Method: Cr. Unissued Share Capital
3. To record subscription
Dr. Cash, PPE &Land(@FMV)
Cr. Share Capital
Cr. Share Premium (if Sobra)
4. To record Payment for Organization Services
Dr. Legal Expenses
Cr. Share Capital

SHARE HOLDERS EQUITY:

Memo Method:
Entry Method:
Share Capital
+ Subscribed Share Capital Authorized Share Capital
- Subscriptions Capital Less: Unissued Share Capital
+ Share Premium Issued Share Capital
= Total Shareholder’s Equity + Subscribed Share Capital
Less; Subscription Receivable
+ Share Premium
ORDINARY & PREFERENCE = = Total Shareholder’s Equity

MEMO Method: The Company was authorized to issue

share capital as follows:

Preference, P______ par, _______ shares

Ordinary , P______ par, _______ shares
Total Authorized Shares
Entries:

1. To record issued shares

Dr. Cash / PPE & Land (@FMV)
Cr. Ordinary share Capital/ Preference share capital
Cr. Share premium- OS / Share Premium – PS
2. To record subscription
Dr. Subscription Receivable – PS or OS
Cr. Subscribed Preference Share/ Subscribed Ordinary Share
 If : Received / Collected

Dr. Cash
Cr. Subscription Receivable – PS or OS
3. To record Issuance of Share certificate ( If Fully Paid)
Dr. Subscribed Preference/ Ordinary Capital
Cr. Preference / Ordinary Share Capital IF: Entry Method: Cr. Unissued Share Capital
4. To record subscription
Dr. Cash, Land(@FMV)
Cr. Share Capital
Cr. Share Premium (if Sobra)
5. To record Payment for Organization Services
Dr. Legal Expenses
Cr. Preference/ Ordinary Share Capital
6. To closed Net income to retained Earnings 9. To record Appropriated Retained Earnings to TS –
Dr. Profit and Loss every end of the year
Cr. Retained Earnings Dr. Retained Earnings
7. To record Retirement
Cr. Retained Earnings Appropriated for TS
Dr. Preference Share/ Ordinary Share
Dr. Share premium – PS/ OS
Cr. Share Premium- PS/OS Retirement
Cr. Cash
8. To Record Donated Capital
 Receipts of Donated Shares

“ Received ___________ ordinary/preference shares as donation from Shareholders.”

“ Received from shareholders as donated _________ ordinary/ preference shares with P____ par value”

 Re-issued of Donated Shares

Dr. Cash
Cr. Donated Capital

SHAREHOLDERS EQUITY:

+Preference Share Capital (issued – unissued) SHAREHOLDERS EQUITY:

+Ordinary Share Capital (issued – unissued ) +Preference Share Capital
+ Subscribed Preference Capital +Ordinary Share Capital
+ Subscribed Ordinary Capital + Subscribed Preference Capital
-Subscription Receivable- PS + Subscribed Ordinary Capital
-Subscription Receivable- OS -Subscription Receivable- PS
+ Share Premium- PS -Subscription Receivable- OS
+ Share Premium- OS + Share Premium- PS
+ Share Premium- PS Retirement + Share Premium- OS
+ Share Premium- TS + Retained Earnings
+ Donated Capital = Total Shareholder’s Equity
Retained Earnings:
Unappropriated
+ Appropriated for TS
-Treasury Shares
= Total Shareholder’s Equity
TREASURY SHARES:

Entries:

1. To record Acquisition of TS
Dr. TS
Cr. Cash
2. To record Reissued TS ( More Than The Acquisition)
Dr. Cash
Cr. Share Premium- TS
Cr. TS
3. To record Reissued TS ( Less Than the Acquisition)
Dr. Cash
Dr. Retained Earnings
Cr. TS
4. If Treasury Shares are not ReIssued
Dr. Ordinary Share / Preference Share
Dr. Share premium –OS/ PS
Dr. Retained Earnings
Cr. TS

ENTRY FOR CONVERTION:

A. Share to Share Basis ( PS to OS)

Dr. Preference Share Capital (shares converted X par - PS)
Dr. Share Premium – PS ( shares converted / total shares X Total Share Premium)
Cr. Ordinary Share Capital ( Shares converted X par – OS)
Cr. Share Premium OS

B. Callable and Called

a. IF more than par
Dr. PS capital (shares converted X par - PS)
Dr. Share Premium –PS ( shares converted / total shares X Total Share Premium)
Dr. RE
Cr. Cash ( Shares X par/payment)

b. If Less than par

Dr. PS capital (shares converted X par - PS)
Dr. Share Premium –PS ( shares converted / total shares X Total Share Premium)
Cr. Share Premium-Redemption
Cr. Cash ( Shares X par/payment)

TOTAL LEGAL CAPITAL

+Preference Share Capital ISSUED SHARES

+Ordinary Share Capital
+Subscribed Ordinary Share Total PAR Value – PS or OS
+Subscribed Preference Share Divided by Stated Value per Share
TOTAL LEGAL CAPITAL ISSUED SHARES- PS or OS
RETAINED EARNINGS,END

RE Beg.
Net income
Less: Dividends
Retained Earnings, End

OUTSTANDING SHARES = Issuance less: Acquisition/TS + Reissuance of TS + Shares Subscribed

Sa Split only do NUMBER OF SHARES AND PAR VALUE do ga Change But not the Total Amount of
Acquisition Same as sa Premium

RETAINED EARNINGS – Appropriation is every end of the year (amount sa TS halin)

Number of shares outstanding X dividend per share = DIVIDENDS PAYABLE

1. To record Recognize/ DECLARATION of DIVIDEND / in increase Dividends Payable

Dr. Retained Earnings
Cr. Dividends Payable Note: If Stock, Stock Dividends Payable
2. To record PAYMENT of Dividend
Dr. Dividend Payable
Cr. Cash
3. Entry for the Settlement of Dividends Payable
Dr. Dividends Payable ( @ latest par value)
Cr. Gain on distribution of DP
Cr. Investment in Equity Securities
4. To Close Income summary account
Dr. Income Summary NUMBER OF STOCK DIVIDENDS DECLARED
Cr. Retained Earnings
5. To record IMPAIRMENT LOSS = RA-CA  IF Large @ Par value
Dr. Impairment loss  IF Small @ Fair Value ( then may Share
Cr. Asset/Cash premium ng account sa DECLARATION)
6. To record Issuance of Certificate
Dr. Stock Dividends Payable /
Dividends Payable
Cr. Share Capital / Treasure Shares ( kapag TS)
7. To record Stock Right Exercise / Sold (equal sa Outstanding Shares)
Dr. Cash
Cr. Share Capital Exercise of Stock rights Memo:
Cr. Share Premium Issued _______ rights to enable the shareholders to
purchase ______ shares at _____ per share plus one right.