UNIVERSAL COLLEGES OF PARANAQUE INC.

COLLEGE OF BUSINESS AND ACCOUNTANCY

FINANCIAL ACCOUNTING AND REPORTING 2

EXERCISE PROBLEM 1:

THE MILLENIUM PHILIPPINES CORPORATION HAS BEEN AUTHORIZES TO ISSUED 100,000 SHARES
ON DECEMBER 1, 2020. SEVEN INCORPORATORS SUBSCRIBED TO A MINIMUM REQUIRED SHARES AT
THE PAR VALUE OF P100.00. THE CONTRACT REQUIRES FOR A 25% DOWNPAYMENT, 50% PAYMENT ON
THE BALANCE AFTER 60 DAYS AND THE REMAINDER PAYABLE AFTER 60 DAYS FROM DATE OF
SUBSCRIPTION.

THE FOLLOWING ARE THE ADDITIONAL STOCK TRANSACTION IN 2021.

JAN 3 – ISSUED 4,000 SHARES AND COLLECTED CASH OF P105 PER SHARE

JAN 4 – RECEIVED SUBSCRIPTION FROM SEVERAL SUBSCRIBER FOR 3,000 SHARES AT P108 PER SHARE. A
25% DOWNPAYMENT WAS RECEIVED FROM THE SUBSCRIBERS.

JAN 10 – PROFESSIONAL FEES AMOUNTING TO P100,000 WERE PAID TO QUALITY CONSULTANCY INC.
WHO MADE A FEASIBILITY STUDY AND WORK ON THE LEGAL PAPERS NEEDED FOR ITS INCORPORATION.

JAN 12 – A LOT WORTH P55,000 WAS RECEIVED IN EXCHAGE FOR 500 SHARES.

JAN 25 – 100 SHARES OF STOCK WERE ISSUED TO A LAWYER IN PAYMENT FOR HIS LEGAL SERVICES
BILLED AT P12,000.

JAN 30 – FIRST INSTALLMENT PAYMENT WAS COLLECTED FROM THE INCORPORATORS.

MAR 31 – THE INCORPORATORS PAID THE BALANCE OF THEIR ACCOUNTS.

JUNE 20 – SUBSCRIPTION ON JAN 4 FOR 2,000 SHARES WERE COLLECTED IN FULL. ISSUED THE
CORRESPONDING STOCK CERTIFICATES.

DIRECTION;

JOURNAL ENTRIES FOR THE ABOVE TRANSACTIONS WITH EXPLANATION USING

1. JOURNAL ENTRY METHOD.

2. MEMORANDUM METHOD