5-pts ADD’L TO ACTG124 MID-TERM EXAM

(ANSWERS SHOULD BE HANDWRITTEN; DEADLINE APRIL 28-WED.

PHILMARKETING Corporation’s stock transactions for the month of January are summarized below.

Jan. 1 - The corporation was authorized to issue 50,000 preference shares with par value of P 150 per
share and 100,000 ordinary shares with stated value of P 100 per share. 25% of the authorized capital
stock was subscribed by incorporators and 25% of the subscriptions were paid

3 - Cash subscription received, 20,000 preference shares at P160/share and 30,000 ordinary shares at
102/share.

5 - Issued 200 ordinary shares to a lawyer who drafted the Articles of Incorporation and corporate by-
laws whose bill for the services rendered was P25,000.

10 - Received subscriptions for 10,000 ordinary shares at P104 per share, receiving a 25% down
payment.

12 - Received subscriptions for 5,000 preference shares at P155 per share, receiving a down payment of
40%.

25 - Collected the balance due from the subscriptions received on January 10 and issued the
corresponding stock certificates.

26 - Issued 2,000 ordinary shares in exchange for a 150 square meter lot, appraised at P 220,000.

27 - Issued 500 preference shares in exchange for equipment with a market price of P 80,000. 28 -
Issued 300 ordinary shares to a bank in payment for a loan made earlier in the amount of P 38,000.

30 - Collected the balance of the subscriptions on January 12 with the corresponding stock certificates
being issued.

REQUIRED: a. Journal entries to record the above transactions using journal entry and memorandum

entry method

b. Prepare the Shareholders’ Equity section of the Balance Sheet under both methods