Professional Documents
Culture Documents
Organization and Formation of A Corporation E 8-1
Organization and Formation of A Corporation E 8-1
E 8-1
a. Memorandum entry method
Jan. 1 Authorized to issue 250,000 shares of 10% preference share capital with a par value of
P100.
1 Authorized to issue 500,000 shares of ordinary share capital with a stated value of P20.
1 Cash 9,375,000
Preference Share Capital (62,500 x P100) 6,250,000
Ordinary Share Capital (125,000 x P20) 2,500,000
Ordinary Share Capital in Excess of Stated Value 625,000
1 Cash 9,375,000
Unissued Preference Share Capital 6,250,000
Unissued Ordinary Share Capital 2,500,000
Ordinary Share Capital in Excess of Stated Value 625,000
E 8-2
a. Memorandum entry method
Apr. 1 Authorized to issue 500,000 shares of ordinary share capital with a par value of P20.
1 Cash 7,200,000
Ordinary Share Capital (200,000 x P20) 4,000,000
Ordinary Share Premium 3,200,000
1 Cash 7,200,000
Unissued Ordinary Share Capital 4,000,000
Ordinary Share Premium 3,200,000
E 8-3
1. Authorized to issue 500,000 shares of ordinary share capital with a par value of P20
Cash 6,250,000
Ordinary Share Capital (250,000 x P20) 5,000,000
Ordinary Share Premium (250,000 x P5) 1,250,000
2. Authorized to issue 500,000 shares of Ordinary Share Capital with a stated value of P15.
Cash 6,250,000
Ordinary Share Capital (250,000 x P15) 3,750,000
Ordinary Share Capital in Excess of Stated Value 2,500,000
3. Authorized to issue 500,000 shares of no-par and no stated value Ordinary Share Capital.
Cash 6,250,000
Ordinary Share Capital (250,000 x P25) 6,250,000
APC – Chapter 8 (2007 edition) page 3
E 8-4
Authorized to issue 500,000 shares of ordinary share capital with a stated value of P20.
a. Cash 2,500,000
Ordinary Share Capital (125,000 x P20) 2,500,000
d. Land 300,000
Ordinary Share Capital (10,000 x P20) 200,000
Ordinary Share Capital in Excess of Stated Value 100,000
e. Cash (50,000 x P24) 1,200,000
Ordinary Share Capital (50,000 x P20) 1,000,000
Ordinary Share Capital in Excess of Stated Value 200,000
E 8-5
June 1 OSC Subscription Receivable (35,000 x P50) 1,750,000
OSC Subscribed (35,000 x P20) 700,000
Ordinary Share Premium (35,000 x P30) 1,050,000
1 Cash (P1,750,000 x 60%) 1,050,000
OSC Subscription Receivable 1,050,000
E 8-6
July 1 Cash 3,125,000
Ordinary Share Capital (125,000 x P10) 1,250,000
Preference Share Capital (12,500 x P100) 1,250,000
Ordinary Share Capital in Excess of Stated Value 625,000
12 Cash 900,000
OSC Subscription Receivable 900,000
P1,500,000 x 60% = P900,000
E 8-7
Sept. 1 OSC Subscription Receivable (125,000 x P30) 3,750,000
OC Subscribed (125,000 x P20) 2,500,000
Ordinary Share Premium (125,000 x P10) 1,250,000
8 Land 750,000
Ordinary Share Capital (25,000 x P20) 500,000
Ordinary Share Premium 250,000
10 Cash 750,000
OSC Subscription Receivable 750,000
P2,200,000 / 3 = P750,000
20 Cash 750,000
OSC Subscription Receivable 750,000
30 Cash 750,000
OSC Subscription Receivable 750,000
E 8- 8
a. OSC Subscription Receivable (125,000 x P25) 3,125,000
OSC Subscribed (125,000 x P10) 1,250,000
Ordinary Share Capital in Excess of Stated Value 1,875,000
f. Cash 200,000
Receivable from Highest Bidder 200,000
OSC Subscribed 150,000
Ordinary Share Capital (15,000 x P10) 150,000
P 8-1
Aug. 1 Authorized to issue 50,000 shares of P100 par value preference share capital.
1 Authorized to issue 500,000 shares of P20 par value ordinary share capital.
2 Cash 540,000
PSC Subscription Receivable 540,000
P1,800,000 x 30% = P540,000
P 8-2
Nov. 2 OSC Subscription Receivable (50,000 x P60) 3,000,000
OSC Subscribed (50,000 x P50) 2,500,000
Ordinary Share Premium (50,000 x P10) 500,000
5 Equipment 700,000
Ordinary Share Capital (10,000 x P50) 500,000
Ordinary Share Premium 200,000
26 Cash 255,000
Receivable from Highest Bidder 255,000
P 8-3
Partnership Books
1. Inventories 90,000
Capital Adjustment Account 90,000
4. Goodwill 156,000
Capital Adjustment Account 156,000
FMV of OS issued (14,000 sh@P70) P980,000
Adj. NA, excluding cash
(P112,000+P296,000+P520,000-P104,000) 824,000
Goodwill P156,000
P 8-4
1.
a. Land 150,000
Preference Share Capital 100,000
Preference Share Premium 50,000
b. Cash 35,000
Preference Share Capital 25,000
Preference Share Premium 10,000
d. Cash 78,000
Ordinary Share Capital 60,000
Ordinary Share Premium 18,000
P 8-5
APC – Chapter 8 (2007 edition) page 9
P 8-6
1. P1,440,000/ P50 = 28,800 shares
2. P1,360,000/P10 = 136,000 shares
3. P720,000 / P50 = 14,400 shares
4. P280,000/P10 = 28,000 shares
5. (P2,160,000 + P216,000) / (28,800 + 14,400) = P55
6. (P1,640,000 + P328,000) / (136,000 + 28,000) = P12
7. P360,000 / 14,400 shares = P25
8. P12 – (P182,000/28,000 sh) = P5.50
Multiple Choice
8-1 D 25,000 sh x P24 x 25% = P150,000
8-2 A
8-3 D 4,000 sh x P110 x 25% = P110,000
8-4 C 2,000 sh x P17 = P34,000
8-5 A (25,000 + 1,000 + 5,000) x P20 = P620,000
8-6 D (25,000 x P2) + (1,000 x P4) + (5,000 x P6) = P84,000
8-7 D (P900,000 – P750,000) + (P100,000 x P15) + (5,000 x P5) = P1,675,000
8-8 D [(50,000 + 50,000 +100,000) x P15] + (5,000 x P50) + P1,675,000 = P4,925,000
8-9 B
8-10 D (100,000 x P30) + (3,000 x P50) =3,150,000
8-11 B (7,500 + 6,000 x P4) = P54,000
8-12 A
8-13 A
8-14 A
8-15 D
TM 28
1. T 6. T 11. T 16. F 21. T
2. F 7. F 12. T 17. T 22. T
3. F 8. F 13. F 18. T 23. T
4. T 9. T 14. F 19. F 24. F
5. F 10. T 15. T 20. F 25. T
APC – Chapter 8 (2007 edition) page 10
TM 29
1. Corporation 11. Outstanding share capital
2. Incorporation 12. Delinquent subscriber
3. Domestic corporation 13. 25%
4. Incorporators 14. 25%
5. Pre-operating costs/organization costs 15. Paid-in capital in excess of stated value
6. Stated value 16. P5.00
7. Ordinary share capital 17. 50 years
8. Preference share capital 18. Stock certificate
9. Par value 19. P Receivable from highest bidder
10 Ordinary share capital 20. Goodwill
TM 30
1. C 5. C 9. A 13. C 17. D
2. C 6. A 10. B 14. B 18. A
3. D 7. B 11. B 15. C 19. C
4. C 8. D 12. C 16. B 20. D
TM 31
Problems
C.
1. 57,600 sh P2,880,000 / P50
2. 272,000 sh P2,720,000 / P10
3. 28,800 sh P1,440,000 / P50
4. 56,000 sh P560,000 / P10
5. P55 (P4,320,000 + P432,000) / (57,600 + 28,800) = P55
6. P12 (P3,280,000 + P656,000) / (272,000 + 568,000) = P12
7. P25 P720,000 / 28,800 = P25
8. P5.50 P12 – (P364,000/56,000)