FINANCI ALACCOUNTI NGANDREPORTI NG-CORPORATION( QUESTIONNAIRE/REVIEWER)

CORPORATI ON:FORMATIONANDSHARECAPI TALTRANSACTI ONS

1.Theel ementsofaccounti
ngequat
ioni
ndif
ferentf
orm ofbusi
nessorgani
zat
ionremaint
hesame
exceptforwhichofthefol
lowi
ng?
A.Assets
B.Liabi
l
iti
es
C.Equit
y
D.Noneoft hese

2.Whi
choft
hef oll
owingstatement sisCORRECT?
A.Oneoft hecharacteri
sti
csofcor porati
onistheri
ghtofsuccessi
onwhichmeansthatt
hel
i
fe
ofacorporateenti
tyisimmor tal
B.Theexistenceofthecor porati
onstartswit
ht hemereagreementoftheshar
ehol
der
s
C.Deathofev enamaj orshar eholder
sdoesnotdi ssol
vethecorporat
ion
D.Theexistenceofthecor porati
onislimit
edto60y ear
s.

3.Anadvantageofcor porat
ionoverapartner
shi
pisthat__
___
A.acor porati
onislesscostl
ytoorgani
zeandlesscompli
catedtooper
ate
B.issubjecttomor egovernmentregul
ati
ons
C.ithasper sonalel
ementoftrustandconfi
denceamongtheinvest
ors
D.ithascont inui
tyofexi
stenceanddeath,i
ncapaci
ty,
orinsol
vencyofashar
ehol
derdoes
notaffectitsexist
ence

4.ABCCompanywasaut hori
zedt
oengagei
nbuy
ingandsel
l
ingofcosmet
icpr
oduct
s.Thi
smeans
thatt
hebusinesshasan_ ___
__
A.Expresspower
B.I
ncidental
power
C.I
mpl i
edpower
D.Special
power

5.Whi
chofthefol
lowingbestdescribes" parval
ue"?
A.Itr
epresent
swhatashar eofst ockiswor t
h
B.Itr
epresent
st heor
igi
nal sell
ingpr i
ceofashareofstock
C.Iti
sthelegalcapit
alestablishedf orashareofstock
D.Iti
sestabli
shedforashar eofst ockafteri
tisi
ssued

6.Whi
chofthestatement
si s/ar
eI NCORRECT?
A.Liabi
li
ti
esofashar eholderisli
mitedtohiscontr
ibuti
ontothecorporat
ion
B.Corporati
oniscreatedbyt hepresenceofthelaw
C.Thesal eofashareholderofhi ssharesofstockrequir
estheapprovaloftheot
her
sharehol
ders
D.Theasset soft
hecor porationareseparat
efrom thoseofi
tsoff
icersormembers.

7.Thefol
l
owingar
ethecharacteri
sticspr esenti
nbothpar
tner
shi
pandcor
por
ati
onexceptwhi
chone?
A.Bot
hhavetheirownjuri
dical personal
it
y
B.Bot
haresubjectt
oincomet ax
C.Bot
hhaveanunl i
mitedli
abi l
ity
D.Bot
haresubjectt
otheregul ationsofthel
aw

8.Themanagementofacorpor
ati
oni
svest
edi
nthe_
___
__
A.Boar
dofDirect
ors
B.Shar
ehol
ders
 C.partners
D.Incorporat
ors

9.Whi
chofthef ol
lowingi
sani ncorr
ectst
atementaboutcor porati
on?
A.Acor porati
onisanent i
tysepar
ateanddi sti
nctfr
om itsowners
B.Corporatecredit
orsordinar
il
yhavear ecourseonlytocorpor
ateasset
sinsat
isf
act
ionof
thei
rclaims
C.Acor porati
onmaybef ormedinwr i
ti
ng, oral
lyorimpli
ed
D.Acor porati
onissubjecttonumerousst ateandfederalr
egul
ati
ons.

10.St
atement1: Acorporat
ionhaslimit
edl i
febecausedeathorwithdr
awal ofashareholder
dissolvesandl i
qui
datesthecorporati
on
St
atement2: Anypremium orpaidincapital
onshar ecapit
alsol
dthroughasubscr i
ptioni
s
recordedatt hedatethesubscri
ptioncontr
actissignedrat
herthanwhent hesharecapit
ali
s
issued.
A.Onl ystatement1iscorrect
B.Onl ystatement2iscorrect
C.Bot hstatementsarecorrect
D.Bot hstatementsar ei
ncorrect
.

11.St
atement1: Si mil
artoapartnership,
acorpor
ati
onmaybeformedbyt hemer eagreementoff
ive
ormor eper sons
St
at ement2: Thecostsoforgani zi
ngacorpor
ati
onar
erecognizedasassetsbecausethe
economicbenef it
sarereceivedduringt
heperi
odofcor
porateexi
stence.
A.Onlystat ement1iscorrect
B.Onlystat ement2iscorrect
C.Bothst atementsarecor r
ect
D.Bot hstatement sar
eincor rect

12.St
atement1:Theowner sofacor por
ati
onar
eli
ableforpar
tner
shi
pdebt
sev
enbey
ondt
hei
r
cont
ri
buti
ont othecorporati
on
St
atement2:Preferencesharedoesnotusuall
ycarr
ytheri
ghttovot
e
A.Onlyst
atement1i scorrect
B.Onlyst
atement2i scor r
ect
C.Bothst
atement sarecorrect
D.Bothst
atement sareincorrect

13.Whi
choft hefoll
owingstat
ementsconsiderasadisadvantageofacorporati
on?
A.Theprocessoff or
mingacorporati
onismorecost l
yandcompl i
cated
B.I
tissubjecttomoretaxesandrigi
dgov er
nmentcont r
olandregul
ations.
C.Becausecor por
ati
onischar
acteri
zedbyabsenteeowner shi
p,per
sonal el
ementmaybe
l
acking.
D.Allofthese

14.St
atement1: Non-cashasset sr ecei
vedbyacor por
ati
oni nexchangeforsharecapi
tal
issuedar
e
recor
dedattheparv alueoft hesharesissued.
St
at ement2:Anadv antageofacor porati
onov erapartnershi
pisthati
tislesssubj
ectto
governmentregulat
ions
A.Onlystatement1i scor rect
B.Onlystatement2i scor r
ect
C.Bothstatement sar ecorrect
D.Bot hst
atement sar eincor r
ect
15.St
atement1: Shareholdersownt hebusi
nessandmanaget
heday-
to-
dayaff
air
softhe
corporat
ion
St
atement2: Pref
erencesharedi vi
dendsar
eusual
lypai
dpr
iort
opaymentofordi
nar
yshar
e
divi
dends
A.Onlystatement1i scorrect
B.Onlystatement2i scorr
ect
C.Bothst at
ement sarecorrect
D.Bothst at
ement sareincorrect

16.Toamendt hear t
icl
esofi ncorporat
ion,itwil
lrequi
rea_ __
___
A.maj or
ityv oteoftheboar dandav ot
ebyt heshareholder
srepresenti
ngatl
easttwo-
thi
rds
oftheoutst andingshar ecapital
B.majorit
yv ot eoftheboar dandav otebyshareholdersofatl
easthalfoft
heoutst
andi
ng
sharecapital
C.maj or
it
yv ot eofallshareholdersandt heboard
D.atleasthal fofvoteoft heboar dandtheshar ehol
ders

17.I
tisacorporat
ionor ganizedandi
ncor
por
atedundert
hePhi
l
ippi
nel
aws.Whati
sit
?
A.Domest i
cCor por ati
on
B.For
eignCor poration
C.Publi
cCor porati
on
D.Quasi-
PublicCor porati
on

18.I
tisacorporat
ionthathasacceptedagr
antf
rom t
hest
ateoraf
ranchi
set
oper
for
m publ
i
cdut
ies.
Whatisi
t?
A.Domest i
cCor porat
ion
B.For
eignCor porati
on
C.Publi
cCor porati
on
D.Quasi-
Publ i
cCor porat
ion

19.I
tisacorpor
ati
onwhoseowner shi
pisdi
vi
dedi
ntouni
tscal
l
edshar
esofcapi
tal
stock.Whati
sit
?
A.StockCorporation
B.Non-st
ockCor porati
on
C.OpenCorporation
D.Cl
oseCorporat i
on

20.I
tisacor porati
onorganizedforr
eli
giouspur
posespr
imar
il
ycomposedofspi
ri
tualper
sons.What
i
sit?
A.Ecclesiasti
calCorporat
ion
B.LayCor porati
on
C.Civi
l Corporat
ion
D.Eleemosy naryCorporat
ion

21.Itisacorporat
ionwhoseowner shi
pisl
i
mit
edt
ofewper
sonsandi
tsshar
esar
enotav
ail
abl
efor
purchasebythepublic.Whatisit
?
A.Li
stedCorpor ati
on
B.Over-
the-
count erCor
porat
ion
C.OpenCorpor ati
on
D.Cl
osedCor por ati
on

22.St
atement1:
Themaxi
mum numberofshar
esofst
ockt
hatt
hegov
ernmentgr
ant
sacor
por
ati
on
 permissi
ontoissueistheauthori
zedshar
es.
St
atement2:Astockcerti
fi
cateisissuedt
othesubscr
iberuponf
ull
pay
mentofhi
ssubscr
ipt
ion
A.Onlystat
ement1i scorrect
B.Onlystat
ement2i scorrect
C.Bothstatementsarecor r
ect
D.Bothstat
ement sareincorr
ect

23.St
atement1: Underj ournal entr
ymet hodofaccountingforsharecapi
taltr
ansacti
ons,theaccount
"Shar
eCapi tal"iscrediteduponi ssuanceofsharecapital.
St
atement2: Shar esissuedi nexchangef orser
vicesrecei
v edshal
lberecordedatthefairv
alue
oftheser
v icesr ecei
v edort hef airval
ueofthesharesissuedwhicheverismorer el
i
ably
deter
minabl e.
A.Onlyst
at ement1i scor rect
B.Onlystatement2i scor r
ect
C.Bothstat ement sar ecorrect
D.Bothstat ement sar eincorrect

24.St
atement1: Becauseoft hepowerofsuccessi
on,
acorpor
ati
onhasanunli
mit
edl
if
e.
St
at ement2:Aprivat
ecor porati
onisonecreat
edf
ort
hepurposeofgov
erni
ngapar
ticul
ar
segmentofthegov ernment
A.Onlystatement1i scorrect
B.Onlystatement2i scorr
ect
C.Bothstatementsar ecorrect
D.Bothstatementsar eincorrect

25.St
atement1: Thecertif
icateofcapi t
alstockisawri
tt
enacknowledgementbythecor
porat
ionof
theshareholder
s'interestinthecorporati
on.
St
at ement2:Anor di
naryshar eholderhastheri
ghtt
ov ot
eintheelect
ionoft
heboardofdi
rect
ors
ofthecorporat
ion
A.Onlystatement1i scor rect
B.Onlystatement2i scor rect
C.Bot hst
atement sar ecor r
ect
D.Bot hst
atementsar ei ncorr
ect

26.St
atement1: Thecorpor
ati
onwi l
l al
waysi
ssueal
lthedel
inquentshar
est
othehighestbidder
.
St
atement2: Acorporat
ionhast hepowert
oacquirei
tsownassetsandi
ncurf
inancial
obl
igat
ions.
A.Onlystatement1iscorrect
B.Onlystatement2iscorrect
C.Bothstatementsarecor r
ect
D.Bothstatementsareincorr
ect

27.St
atement1: Underthejournalent r
ymet
hodofaccounti
ngforsharecapi
tal
,theamountofissued
sharecapitalisdeter
minedbydeductingthebal
anceofUnissuedShareCapit
alaccountf
rom
thebalanceofAut hori
zedShar eCapi
tal
account
.
St
atement2: Anomi nalval
uest atedont
hefaceofthest
ockcerti
ficat
eandintheart
icl
esof
incor
poration.
A.Onlystatement1i scorrect
B.Onlystatement2i scorrect
C.Bothst atementsarecor r
ect
D.Bothstat ementsareincorrect
28.St
atement1: Whenshareswi t
houtparv alueandst atedvalueareissued,pr
oceedsshal
lbe
credi
tedtoShareCapitalaccount
St
atement2:Thelegalcapit
alofacor porationthatissuesparvaluesharesisequal
tothet
otal
consi
derati
onsreceiv
edorr eceivabl
ef rom sharesissuedandsubscr i
bed.
A.Onlystatement1iscor r
ect
B.Onlystatement2iscorrect
C.Bothstatementsarecorrect
D.Bothstatementsareincorrect

29.St
atement1: Anopar,nostat
edv aluesharecapi
tal
couldbeissuedatami
nimum amountofone
peso.
St
atement2:Atleast25%ofshar esaut hor
izedmustbesubscri
bedandatl
east25%ofthe
subscri
pti
onpricemustbepai dbyt hesubscri
bers.
A.Onlystatement1iscorr
ect
B.Onlystatement2iscorr
ect
C.Bothstatementsarecorrect
D.Bothstatementsarenotcor rect

30.St
atement1:Paidi
ncapit
al i
scapi t
alf
rom contr
ibut
ionsbytheshareholder
swhi
chi
sal
ter
nat
ivel
y
cal
l
edcontri
but
edcapit
al
St
atement2:Pai
dincapi
talincludesshar
epr emium andret
ainedearni
ngs
A.Onlyst
atement1iscor rect
B.Onlyst
atement2iscorrect
C.Bothst
atementsarecorrect
D.Bothst
atementsareincorrect

31.St
atement1: Aholderofapr ef er
encesharehasthepr
ior
it
yast othedist
ri
butionofassetsi
nthe
eventofcorporateli
quidation
St
atement2: I
ncaseswhent hereisnobidderf
oradeli
nquentsubscr
ipti
on,thesubscri
bed
sharesshallbeissuedinthenameoft hecorpor
ati
onandshallbeconsideredastreasur
y
shares.
A.Onlystatement1i scorrect
B.Onlystatement2i scorrect
C.Bothstatement sarecor rect
D.Bothstatement sareincor r
ect

32.St
atement1: Underj
our nal
ent rymethod,aut
horizedshar
ecapital
mi nustheunissuedshar
e
capi
talequalstheissuedshar ecapit
al
St
atement2: Subscri
ptionreceivabl
eisrepor
tedascur r
entasseti
fitiscoll
ect
iblewit
hin12
monthsfrom theendoft heaccounti
ngperiod.
A.Onlystatement1i scor r
ect
B.Onlystatement2i scor r
ect
C.Bothstatementsar ecor rect
D.Bothstatementsar ei
ncor rect

33.Whi
choft hefoll
owingis/
arei ncludedintheprocessofor
gani
zi
ngcor
por
ati
on?
A.Promot i
on
B.Fi
lli
ngthearti
clesofincorpor at
ion
C.Commencementofcor poratebusiness
D.Allofthese

34.I
tist
hegov
ernmentagencywhi
chi
staskedt
opr
otectt
hei
nter
estoft
heshar
ehol
der
s,cr
edi
tor
s
andot
herpublicinvestor
s.Whati si
t?
A.Securit
iesandExchangeCommi ssion
B.DepartmentofTr adeandIndustr
y
C.Cooperati
v eDevelopmentAuthori
ty
D.BureauofI nt
ernalRevenue

35.I
tref
erstoacont r
actbet
weenapr
ospect
iveshar
eholderandthecor
por
ati
onf
ort
hepur
chaseof
shar
eswithpaymentdueatoneormor
especif
iedfut
uredates.Whati
sit
?
A.Subscri
pti
on
B.Promoti
on
C.Incor
porat
ion
D.Formati
on

36.I
tisanomi nalval
uest
atedi
nthecor
por
ateby
-l
awsf
orwhi
chnoparv
alueshar
ecoul
dbei
ssued.
Whatisi
t?
A.ParValue
B.Stat
edVal ue
C.No-parValue
D.Nomi nalVal
ue

37.Iti sapr el
iminar
ystepini ncorporati
onwherebytheincorporator
sset-
upat entati
veworki
ng
organizat
ionforthecorporat
ionandsol ici
tsubscr
ipt
ionf
rom investorstor
aiset
her equi
redcapi
tal
forthebusiness.Whatisit
?
A.Promot i
on
B.Fil
ingtheart
icl
esofincorporat
ion
C.Pay mentoffi
li
ngandr egi
strat
ionfees
D.Commencementofcor poratebusiness

38.I
ti saf undament ali nst
rumentf il
ed wi
th and appr
oved by t
he Secur
it
ies and Exchange
Commissi
onev i
denci
ngt heor gani
zat
ionofacorporat
ion.Whati
sit?
A.Arti
clesofco-par t
nershi
p
B.Arti
clesofincor porat
ion
C.LawonObl i
gationsandCont racts
D.Corporateby-l
aws

39.Whenoneclassofsharei
sonlyissued,
all
theshar
esar
edeemed_
___
___
A.Ordi
naryShares
B.Pref
erenceShar
es
C.Subscri
bedShareCapi
tal
D.Ei
therAorB

40.Iti
stheamountfixed,usuall
ybythecorporat
echart
er,
tobesubscr
ibedandpaidinorsecur
edto
bepaidinbythesharehol
der sofacorporat
ioneit
heri
nmoneyorinpropert
y,l
abororser
vicesi
nthe
organi
zat
ionofthecorpor
ation.Whatisit
?
A.Capit
alStock
B.LegalCapi
tal
C.CommonSt ock
D.Pref
erredStock

Fori
tems41-43
Thefol
lowi
ngaccount
sar
efoundi
nthet
ri
albal
anceofGoodwi
l
lTr
adi
ngCor
por
ati
onatDecember31,
2013
 Authori
zedOr di
naryShar e,P50par P2,
000,
000
Subscripti
onReceivable-coll
ect
ibl
eonJanuar
y31,
2014 200,
000
UnissuedOr di
naryShar e 800,
000
SubscribedOrdinar
yShar e 400,
000
SharePr emium-OrdinaryShare 300,
000

41.Whatist
hetot
alnumberofshar
esi
ssued?
A.20,
000shar
es
B.18,
000shar
es
C.24,
000shares
D.32,
000shar
es

42.Whatist
hetot
alnumberofshar
esav
ail
abl
eforsubscr
ipt
ion?
A.10,
000shar
es
B.14,
000shar
es
C.16,
000shares
D.24,
000shar
es

43.Whati
sthetotalcont
ri
but
edcapi
tal
?
A.₱1,
700,000
B.₱2,
100,000
C.₱1,
620,000
D.₱1,
540,000

Fori
tems44- 48
Theshareholders'equit
yofJanetCor
por
ati
onattheendof2013and2012ar easf
oll
ows:
2013 2012
12%Pr ef
erenceShare,P100 P1,000,000 P600,000
OrdinaryShar e,
P20par 2,000,000 800,000
SharePr emi um-Pref
erence 160,000
SharePr emi um-Ordi
nary 800, 000 400,000

44.Whati
sthetot
alnumberofor
dinar
yshar
esi
ssuedatDecember31,
2013
A.120,
000shar
es
B.140,
000shares
C.100,
000shar
es
D.130,
000shar
es

45.Howmanyprefer
enceshar
eswer
eissueddur
ing2013?
A.10,
000shares
B.20,
000shar
es
C.30,
000shar
es
D.40,
000shar
es

46.Whati
stheav
eragei
ssuepr
icepershar
eoft
hepr
efer
encei
ssuedi
n2013?
A.₱115
B.₱116
C.₱125
D.₱126
47.Howmanyordinar
yshar
eswer
eissuedi
n2013?
A.100,
000shares
B.120,
000shar
es
C.140,
000shares
D.160,
000shares

48.Whati
stheav
eragei
ssuepr
icepershar
eoft
heor
dinar
yshar
esi
ssuedi
n2013?
A.₱25
B.₱28
C.₱32
D.₱38

Forit
ems49-50
OnJul y1,2013,NokiaCor porat
ion i
ssued 1,000,P10 paror dinar
ysharesand 2,
000 P10 par
convert
ibl
eprefer
enceshar
esf oralump- sum priceofP45, 000.Atthisdat
e,Noki
a'
sordi
naryand
pref
erenceweresell
i
ngatP18andP14pershar e,respect
ivel
y.

49.Whati
stheamountcr
edi
tedt
oShar
ePr
emi
um-Or
dinar
y?
A.₱8,000
B.₱10,000
C.₱15,000
D.₱20,000

50.Whati
stheamountcr
edi
tedt
oShar
ePr
emi
um-
Pref
erence?
A.₱8,000
B.₱10,000
C.₱15,000
D.₱20,000

51.BoschCor por
ati
onwasor gani
zedonJanuary1,2013.I twasauthori
zedbyt heSecur
it
iesand
ExchangeCommi ssi
ontoissuesharecapi
talofP5,
000,000divi
dedinto50,000sharesofP100par
val
ueordinar
ysharecapi
tal
.Theincor
porat
orsimmedi
atelysubscr
ibedto12,500shar
esatpar.

How muchmustbepai dbyt

hei
ncor
por
ator
suponsubscr
ipt
ioni
nor
dert
hati
twoul
dmeett
he
r
equi
rementsoftheSEC?
A.₱312,
500
B.₱320,
000
C.₱410,
500
D.₱430,
000

52.OnApri
l1,2013,GlobeCor
por
ati
on,anewl
yfor
medcompanyhadt
hef
oll
owi
ngshar
ecapi
tal
i
ssuedandout
standi
ng

Or
dinaryShareCapi
tal
,nopar,
P10stat
edval
ue,20,
000sharesori
ginal
l
yissuedatP30per
share
Pr
eferenceShareCapi
tal
,P100par
,600shar
esori
ginal
l
yissuedatP500pershare

Whataretheamount sofOrdi
naryShare, Pr
eferenceShareandAddi
ti
onalPai
d-i
n-Capi
tal
,respect
ivel
y
t
hatGlobeCorporat
ionshouldrepor
tinitsApr il
1,2013stat
ementofshar
ehol
ders'equi
ty?
A.₱200,000;₱60,000;and₱640, 000,respect
ivel
y
B.₱220,000;
₱70,000;and₱400, 000,respecti
vely
C.₱600,000;₱80,
000;and₱200, 000,respecti
vely
 D.₱400,
000;
₱100,
000;
and₱240,
000,
respect
ivel
y

53.For
tuneCompanypr
epar
edt
hisj
our
nal
ent
ryonJune30,
2013

Cash 140,
000
Ordi
nar
yShareCapit
al 130,
000
Shar
ePremium-Ordinar
y 10,
000

Whati
stheparv
alueoft
hesharesandhowmanyshar
eswer
eissued?
A.₱10parand13,
000shares
B.₱13parand10,000shares
C.₱10parand14,
000shares
D.₱14parand10,000shar
es

54.OnJune1, Smar
tCompanyissued8,000sharesofitsP100parordinar
yshar
ecapit
alt
oDixfora
tr
actofLand.Theshareswer
eactiv
elytradedinthestockexchangeatP180perval
ue.OnDi
x'slast
proper
tyt
axbil
l,t
helandhadanassessedv al
ueofP1,000,
000.

Whatistheincreasei
naddi
ti
onalpai
d-i
ncapi
talofSmar
tasar
esul
toft
hef
oregoi
ngi
ssuanceof
shar
es?
A.₱440,000
B.₱340,000
C.₱640,000
D.₱240,000

55.GlobalCompanyexchangesapi eceofequi pmentfor4,000shar

esofInternat
ionalCompany '
s
ordi
narysharecapi talthathasaP100parv alue.TheequipmentcostGlobalP1,000,000when
purchasedfi
vey earsagoandcur r
entl
yhasaf airv al
ueofP560,
000.Theequipmenthasar ecor
ded
accumulateddepreciat
ionofP550,
000inthebooksofGl obal
.

Whati
stheamountcr
edi
tedt
oShar
ePr
emi
um-
Ordi
nar
yasar
esul
toft
hisexchange?
A.₱160,
000
B.₱180,
000
C.₱195,
000
D.₱150,
000

56.Worl
dwideCompanywasauthori
zedt oissue10,000preferencesharesofP200parvalueand
100,
000ordinar
yshar
esofP20parvalue.Subscr
ipt
ionfor4,000pr ef
erenceshar
eswasreceiv
edat
P225persharewit
hadownpaymentof25%.Thebalanceispay ableaft
er60days.

WhatistheamountofSharePremi
um-Pr
efer
encer
ecogni
zedbyWor
ldwi
deuponar
ecei
ptoft
he
pr
efer
enceshar
esubscr
ipt
ion?
A.₱100,
000
B.₱125,
000
C.₱170,
000
D.₱192,
000

57.OnJanuary31,2013,MendozaCompanywasi ncorporat
edwi thanaut hor
izedshar
ecapitalof
P3,000,
000di
videdi
nto100,000sharesofP30par.I
nFebr uar
y,30,000shareswer esol
dforP40per
share.I
nMarch,20,
000sharesweresoldonasubscr i
ptionbasi
satapr i
ceofP45pershar e.Asof
December31,2013,
onehalfofthesubscr
ipt
ioni
nMar chwascol l
ected.
Whatamountwil
lappearont
heDecember31,
2013st
atementoff
inanci
alposi
ti
onasOr
dinar
yShar
e
Capi
tal
?
A.₱800,
000
B.₱900,
000
C.₱700,
000
D.₱1,
500,
000

Fori
tems58-59
Thefol
lowi
ngisthel
istofsel
ect
edaccountbal
ancest
akenf
rom December31,2013gener
all
edger
ofMarcel
oCorpor
ati
on

Account sPayable P1,

400,
000
Account sReceivable 2,
357,
000
OrdinaryShareCapi tal 1,
260,
000
SharePr emium-Or dinaryShare 1,
082,
750
SharePr emium-Pr eferenceShare 92,
100
PreferenceShareCapi tal 500,
000
Subscr i
bedPreferenceShar e 140,
000
RetainedEarnings 191,
950
Subscr i
pti
onRecei vable-Pref
erenceShar
e 105,
000

58.Whati
sthetotalcont
ri
but
edcapi
tal
forMar
cel
oCor
por
ati
onatDecember31,
2013?
A.₱2,
969,850
B.₱2,
129,650
C.₱3,
161,800
D.₱3,
262,800

59.Whati
sthetotalshar
ehol
der
s'equi
tyf
orMar
cel
oCor
por
ati
onatDecember31,
2013?
A.₱2,
969,850
B.₱2,
129,650
C.₱3,
161,800
D.₱3,
262,800

Fori
tems60-
61
Worl
dClassCor
por
ati
on'
srecor
dsi
ncl
udedt
hef
oll
owi
ngshar
ehol
der
s'equi
tyaccount
s

Pref
erenceShare,
P15par ,
200,
000shar
esauthor
ized P2,
550,
000
SharePremium-Pref
erence 340,
000
Ordi
naryShare,
nopar,P50stat
edval
ue;100,
000sharesaut
hor
ized 3,
000,
000

60.Whatwastheav
eragei
ssuepr
iceoft
hepr
efer
enceshar
e?
A.₱15
B.₱16
C.₱17
D.₱18

61.Howmanyordinaryshar
eswer
eissued?
A.50,
000shares
B.60,
000shares
C.70,
000shares
D.80,
000shares
Fori
tems62-
64
Shownbel
owisinf
ormat
ionr
elat
ingt
otheshar
ehol
der
s'equi
tyofPopCompanyasofDecember31,
2013

12%Cumul ati
vePreferenceShareCapital
,P100par P820,
000
OrdinaryShareCapital,P30par
,300,
000shar esaut
hor
ized;
100,000sharesissuedandoutstanding 3,000,000
AdditionalPai
dinCapi t
al 3,300,000
RetainedEarnings(Defici
t) (500,000)

62.Whatwastheor
igi
nal
issuepr
icepershar
eoft
heor
dinar
yshar
es?
A.₱46
B.₱57
C.₱61
D.₱72

63.Whati
sthetotalpai
dincapi
tal
?
A.₱7,
120,000
B.₱7,
720,000
C.₱8,
110,000
D.₱9,
000,000

64.Whati
sthetotal
shar
ehol
der
s'equi
ty?
A.₱6,
120,000
B.₱6,
620,000
C.₱7,
130,000
D.₱7,
320,000

65.Threepar t
nerswhoshar
epr of
it
sandlossesequall
yweretoincor
poratethei
rbusiness.The
capit
alaccountsshowedt
hef
oll
owingbal
ances:
Jechel
l
,P800,
000;
Jaqueli
ne,P1,
200,000;
andJellah,
P2,000,
000

Thenetassetsoft
hepart
nershi
phadthecarr
yingval
ueofP4,
000,
000.Thetotalf
airmarketval
ueof
theseasset
swasP5,200,
000,whichi
sthetotalamountt
hatwil
lbetransf
err
edint hebooksofthe
corpor
ati
on.

Shar
es wil
lbe issued t
o Jechell,Jaquel
ine and Jel
l
ah based on t
hei
rcapit
albal
ances af
ter
adj
ustmentoft
heassetvalues.Thesharecapi
taloft
hecorpor
ati
onwill
haveaparval
ueofP100.

Howmanyshareswil
lberecei
vedbyJel
l
ahuponi
ncor
por
ati
onoft
hebusi
ness?
A.12,
000shares
B.16,
000shares
C.24,000shares
D.32,
000shares

66.Desirabl
eCompanyreceivedasubscri
ptionfor2,000shar esatP18pershareonMar ch31,2014.
Desir
ableCompany '
sshareshave aparv alueP5 pershar e.Desirabl
eCompanycol lect
ed the
subcri
pti
onr eceiv
abl
eonMay15, 2014.Whichofthef ollowi
ngstatementsiscor
rect?
A.Desirabl
eCompanyshouldcredi
tsharepremi um forP13,000onMarch31, 2014
B.Desirabl
eCompanyshouldcreditsharepremi um forP26,000onMarch31, 2014
C.Desirabl
eCompanyshouldcredi
tsharepremi um forP13,000onMay15, 2014
 D.Desi
rabl
eCompanyshoul
dcr
edi
tshar
epr
emi
um f
orP26,
000onMay15,
2014

67.JackandJi llCompanyhasthefoll
owi ngsharecapit
alt
ransacti
onsdur i
ngtheyear
•Issued10,000shareswit
hparv alueofP10pershareforat otalconsi
der
ati
onofP160,
000
•Receivedsharesubscr
ipt
ionsfor20, 000shar
esatasubscr i
ptionpri
ceofP22pershar
e.Onl
y
halfofthesubscr
ipt
ionswerecollectedbytheendofthey ear.

Howmuchisthetotal
shar
epr
emi
um ar
isi
ngf
rom t
heshar
etr
ansact
ionsabov
e?
A.₱60,
000
B.₱320,000
C.₱300,000
D.₱180,000

68.ABC Companywas i ncorporated on Januar

y1,2015 with an authori
zed capit
ali
zati
on of
P1,000,
000di vi
dedint o100,000shar eswithparval
ueofP10pershare.Thefoll
owingweretheshare-
rel
atedtransacti
onsofABCCompanydur i
ngtheyear;
•Cashsubscr ipti
onsof30, 000sharesatP12pershare
•Subscri
ptionsof40, 000shar esatP18pershare.Sev
ent
y-f
ivepercentofthesubscri
pti
on
pri
cewascol lectedduringt heyear

HowmuchistheABCCompany
'st
otal
shar
ehol
der
s'equi
tyaf
terr
ecor
dingt
het
ransact
ionsabov
e?
A.₱900,000
B.₱680,000
C.₱540,000
D.₱360,000

69.TukmolCompany '
stotalshar ehol
ders'
equitywasP900,000beforerecordingt
hefoll
owingshare
tr
ansacti
ons
•Receivedcashsubscripti
onsfor10,000shareswit
hparv al
ueofP1atP14pershar e.Share
issuancecost
samount edtoP2,000
•Receivedsubscr
ipt
ionsf or20,
000shar esatP20pershare.Twenty-
fi
v eper
centdown
pay mentwascoll
ectedonsubscr ipt
iondate.
•Col l
ect
edtheremainingunpaidsubscr i
pti
onpri
ceof15,000subscri
bedsharesandissued
therelat
edsharecerti
fi
cates.Shareissuancecost
samount edtoP3,000

Howmuchi sthebalanceofTukmolCompany
'sshar
ehol
der
s'equi
tyaf
terr
ecor
dingt
het
ransact
ions
abov
e?
A.₱1,
490,000
B.₱1,
510,000
C.₱1,
360,000
D.₱1,
610,000

70.AngelaandBi
ancaarepart
ner
sshar i
ngprof
it
sandl ossesintherati
oof1:2respecti
vel
y.OnJuly
1,2019,theydeci
dedtof or
m ABCor porat
ionbytransferr
ingt heasset
sandl iabi
li
ti
esfrom the
part
nershi
ptothecor
porati
oninexchangefori
tssharesofst ock.Thefol
lowi
ngist hepost-
closi
ng
tr
ial
balanceoft
hepart
nershi
p:

Debi
t Cr
edi
t
Cash ₱45000
AccountsRecei
vabl
e,net 60,
000
I
nv ent
ory 90,
000
Propert
y,Pl
antandEquipment
,net 174000
 Li
abil
i
ties ₱60,
000
Angel
a, Capi
tal 94,
800
Bi
anca, Capi
tal 214,
200

TOTAL ₱369,
000 ₱369,
000

I
twasagreedthatadjustment
sbemadet
othef
oll
owingasset
stobet
ransf
err
edt
othecor
por
ati
on:
AccountsRecei vabl
e 40,
000
Invent
ory 68,
000
Propert
y,PlantandEquipment 180,
600

ABCor porat
ionwasaut
hori
zedt oi
ssue₱100parprefer
renceshar
eand₱10or di
naryshar e.Angel
a
andBi ancaagreedtor
ecei
v efort
heirequi
tyi
nthepartnershi
p720sharesoftheor dinaryshar
es
stockseach,pl
usevenmult
ipl
esof10sharesofpr
efer
encesharesfort
hei
rremai
ninginterest.

Whati sthet ot
alnumberofpr eferenceandor dinar
ysharest
obei
ssuedbyt
hecor
por
ati
oni
n
exchangefortheasset
sandl iabi
l
iti
esoft hepar t
nershi
p?
A.1400ordi
narysharesand2, 592preferenceshares
B.1,
440ordinar
yshar esand2, 592preferenceshares
C.720ordi
narysharesand2, 592preferenceshares
D.740ordi
narysharesand2, 529preferenceshares

PROBLEM 1:
GoodHar v
estCor porati
onwasi ncorporatedonJanuar y1,2014,wi thaut hori
zedshar ecapit
alof
300,
000sharesatP20parv alue.Thef oll
owingt ransacti
onswer ecompl et
eddur i
ngthemont hsof
Januar
yandFebr uary
A.Theincorporatorssubscr ibedtotwent y-f
ivepercentoftheauthori
zedshar ecapit
aland
paid25%oft hesubscr iptionprice.
B.GoodHar vestissued10, 000shar esf orcashatP22pershar e.
C.Thecor por
ationreceivedsubscr ipt
ionf or5,000sharesatP24pershar e.Thi
rt
ypercentof
thesubscripti
onwascol lectedandt hebal anceisdueonMar ch31, 2014.
D.Theincorporatorsin(A)pai dthebal ancedueont hei
rsubscri
pti
ons, andtheshare
cert
if
icateswer eaccor di
ngl yi
ssued.

Requi
red:
A.Recordthef ol
l
owingt ransacti
onsaboveusi
ng:
•Memor andum EntryMet hod
•JournalEntr
yMet hod
B.Presenttheshareholders'equi
tysect
ionoft
hestat
ementoffi
nanci
alposi
ti
onofGood
Har
vestCorporati
ononFebr uary28,
2014usingt
hetwomethods.

SOLUTI
ONSANDANSWERS:
MEMORANDUM ENTRYMETHOD

Memo:
Aut
hor
izedt
oissue300,
000shar
esatP20parv
alue.

A.Cash 375,000
Subscr
ipt
ionReceivabl
e 1,125,
000
Subscri
bedShareCapi
tal 1,
500,
000
Recei
ved25%subscri
pti
onf
rom aut
hori
zedshar e
capi
talandpaidt
he25%oft
hesubscri
pti
onprice
 Comput
ati
on:6,
000,
000x25%=1,500,000
1,
500,
000x25%= 375, 000
1,
500,
000-375,
000=1,125,
000

B.Cash 220,
000
ShareCapit
al 200,
000
SharePremium 20,
000
I
ssued10,000shar
esatP24pershar
e

Comput
ati
on:10,
000x22=220,
000
10,
000-(
10,
000shx20)=20,
000

C. Cash 36,
000
Subscri
pti
onReceivabl
e 84,
000
Subscri
bedShareCapit
al 100,
000
SharePremium 20,
000
Recei
vedsubscri
pti
onfor5,
000sharesatP24pershar
e
andcoll
ected30%ofthesubscr
ipt
ionpri
ce

Comput
ati
on:5,000x24=120,000
120,000x30%=36, 000
120,000-36,
000=84, 000
5,000x20=100,000
120,000-(5,
000shx20)=20,
000

D. Cash 1,
125,
000
Subscri
pti
onRecei
vabl
e 1,
125,
000
Recei
vedt
hebalancef
rom t
hesubscr
ipt
ion(A)

Subscri
bedShareCapi
tal 1,
500,
000
ShareCapi
tal 1,
500,
000
I
ssuedt
hesharecer
ti
fi
cat
e

JOURNALENTRYMETHOD

Uni
ssuedShar eCapi
tal 6,000,
000
Authori
zedShareCapital 6,
000,
000
Authori
zedtoissue6,000,
000shar
ecapit
al
divi
dedinto300,000sharesatP20parv
alue

A.Cash 375,000
Subscr
ipt
ionReceivabl
e 1,125,
000
Subscri
bedShareCapi
tal 1,
500,
000
Recei
ved25%subscri
pti
onf
rom aut
hori
zedshar e
capi
talandpaidt
he25%oft
hesubscri
pti
onprice

Comput
ati
on:6,
000,
000x25%=1,500,
000
1,
500,
000x25%= 375,000
1,
500,
000-375,
000=1,
125,
000
 B.Cash 220,
000
UnissuedShareCapi
tal 200,
000
SharePremium 20,
000
I
ssued10,000shar
esatP24pershar
e

Comput
ati
on:10,
000x22=220,
000
10,
000-(
10,
000shx20)=20,
000

C. Cash 36,
000
Subscri
pti
onReceivabl
e 84,
000
Subscri
bedShareCapit
al 100,
000
SharePremium 20,
000
Recei
vedsubscri
pti
onfor5,
000sharesatP24pershar
e
andcoll
ected30%ofthesubscr
ipt
ionpri
ce

Comput
ati
on:5,000x24=120,000
120,000x30%=36, 000
120,000-36,
000=84, 000
5,000x20=100,000
120,000-(5,
000shx20)=20,
000

D. Cash 1,
125,
000
Subscri
pti
onRecei
vabl
e 1,
125,
000
Recei
vedt
hebalancef
rom t
hesubscr
ipt
ion(A)

Subscri
bedShareCapital 1,
500,
000
Uni
isuedShareCapit
al 1,
500,
000
Issuedthesharecer
ti
fi
cat
e

B.SHAREHOLDERS'
EQUI
TYSECTI
ONOFTHESTATEMENTOFFI
NANCI
ALPOSI
TION
MEMORANDUM ENTRYMETHOD

Shar
ehol
der
s'Equi
ty

Contr
ibutedCapi t
al:
ShareCapi tal,P20par
,300,
000shar
es
authorized,85,000i
ssued P1,
700,000
SubscribedShar eCapit
al 100,000
Less:Subscr ipti
onRecei
vabl
e (
84,000)
SharePr emi um 40,000

Tot
alCont
ri
but
edCapi
tal P1,
756,
000

JOURNALENTRYMETHOD

Shar
ehol
der
s'Equi
ty

Contr
ibutedCapi
tal:
ShareCapit
al,P20par
Authori
zed: 300,
000shares P6,
000,
000
Less:Unissued 215,
000shar
es 4,
300,
000
Issued 85,
000shar
es P1,
700,
000
 Subscri
bedShareCapit
al 100,000
Less:Subscr
ipt
ionRecei
vabl
e (
84,000)
SharePremium 40,000

Tot
alCont
ri
but
edCapi
tal P1,
756,
000

PROBLEM 2:
ABCCor porati
onwhi chissuesP15parv alueor di
naryshar escompl etedt hefol
l
owingtr
ansact
ions
dur
ing2014
A.Receivedsubscripti
onf r
om Mar t
inezf or25,000shar esatP18pershar es.
B.Receivedfrom Mar t
inez45%oft hesubscr ipti
onpr i
ce.
C.Onduedat e,Marti
nezfailedt opayt hebalanceoft hesubscr i
ption.Theshar
eswere
declareddeli
nquentandwer eadv erti
sedforsaleatpubl icauct i
on
D.PaidP4,000f oradverti
singt hesaleoft hedelinquentshar es.
E.Receivedbidsfrom thefollowing
Recto 10,000shar es
Zubir
i 9,000shar es
Pi
chay 12, 000shar es
F.Theamountduef rom thehi ghestbi dderpl
us12%i nterestfort womont hsonthebal
anceof
thesubscr i
pti
onpr i
cewascol l
ect
ed.Shar eswer eaccor dinglyissued

Requi
red:
A.Preparejour
nalentri
esfort
hefor
egoing
B.Whoi sthehighestbi
dder?Det
erminetheshar
eal
l
otmentbet
weent
hehi
ghestbi
dderand
Mart
inez

SOLUTIONSANDANSWERS:
REQUIREMENTA

A.Subscr
ipt
ionReceivabl
e 450,
000
Subscr
ibedOrdinaryShare 375,
000
SharePremium-OrdinaryShar
e 75,
000
Receivedsubscri
pti
onf r
om Mar
ti
nez
f
or25,000sharesatP18pershare

Comput
ati
on:
25,000x18=450,000
25,
000x15=375, 000
450,000-375,
000=75,000

B.Cash 202,
500
Subscri
ptionRecei
vabl
e 202,
500
Col
lectedthe45%ofthesubscr
ipt
ionpr
ice

Comput
ati
on:
450,
000x45%=202,
500

C.Receiv
ablefrom t
heHighestBidder 247,
500
Subscr
ipti
onReceivabl
e 247,
500
Decl
aredthesubscri
pti
onofMar
ti
nez
asdeli
nquentsubscri
pti
on

Comput
ati
on:
450,
000-202,
500=247,
500
 D.Receiv
ablefr
om theHighestBi
dder 4,
000
Cash 4,
000
Expendi
turesi
ncurr
edondeli
nquent
shares

E.Cash 281,
200
Receivablefrom theHighestBidder 251,
500
I
nterestRev enue 29,
700
Coll
ect edtheamountduef rom the
highestbi dder,
Zubir
iplusthe12%
interestont hebal
anceofsubscr i
pti
on

Comput
ati
on:
247,
500+4,000=251,
500
247,
500x12%=29,700

F.Subscr
ibedOrdinaryShare 375,
000
Ordinar
yShar eCapit
al 375,
000
I
ssuedtheshar ecerti
fi
cat
e9,
000shar
es
toZubir
i and16,
000sharest
oMarti
nez

REQUIREMENTB:
•Basedont heentr
iesprovi
dedabov e,t
hehi ghestbidderisZubirisi
ncehewast heonewho
provi
dedthelowestshar
esforthedel
inquentsubscri
pt i
on.Uponisssuanceofsharecert
if
icat
e,Zubi
ri
recei
ved9,000shar
es(hi
ghestbidder
)andMar ti
nezr ecei
ved16,000shares(or
igi
nalsubscri
ber)
.

PROBLEM 3:
Thefol
lowi ngar ethetransact i
onsr el
at etotheshar ehol der s'equityofTel ecom Cor porati
onf or2014,
i
tsini
ti
aly earofoper ati
onsandexi stence.
A.OnJanuar y7,thear t
iclesofincor porati
onwer ef il
edwi t
ht hesecur i
tiesandexchange
commi ssion.TheSECaut hor i
zedt heissuanceof10, 000shar esofP50parv aluepreference
shar ecapitaland200, 000shar esofP10paror dinar yshar ecapi tal.
B.OnJanuar y28, 40,000or dinaryshar eswer ei ssuedatP15pershar e
C.OnFebr uary14, onehundr edtwent ythousandor dinar yshar eswer ei ssuedi nexchangeof
l
andandbui l
dingt hathav eanappr aisedv alueofP700, 000andP1, 100, 000, r
espectivel
y .On
thisdat e,t
heshar est r
adeatP15pershar eonov erthecount ermar ket.
D.OnFebr uary24, thecompanyi ssuedt olawy ers2, 000or dinaryshar esf orlegal ser
vicesi n
connect ionwitht hei ncorporation.Themar ketv alueoft heshar esont hisdatei sP16.
E.OnSept ember12, thecompanyr eceivedsubscr ipti
onsf or10, 000pr eferenceshar esatP53
perv alue.A40%downpay mentaccompani edt hesubscr iptions.Thebal ancei sdueon
Oct ober1.
F.OnOct ober1, thef inalpay menton10, 000shar essubscr ibedi n(e)wasr eceived.

Requi
red:
A.Usingthejournal
entrymethod,r
ecordthef
oregoi
ngtransact
ions
B.Assumet hatther
ewer enoothershar
ecapit
altr
ansacti
onsuntil
December31.Det
ermi
net
he
fol
l
owingasofDecember31.
•Totallegalcapi
tal
•Totaladdit
ionalpai
dincapit
al
•Totalpaidincapit
al
SOLUTIONSANDANSWERS:
REQUIREMENTA

Jan.7 Uni
ssuedPr efer
enceShare 500,
000
Author
izedPr ef
erenceShar
e 500,
000
Authorizedtoissue10,
000pr
efer
ence
sharesatP50parv al
ue

Uni
ssuedOr dinar
yShar e 2,
000,
000
Author
izedOr di
naryShare 2,
000,
000
Authorizedtoissue200,000or
dinar
y
sharesatP10parv al
ue

Comput
ati
on:10,
000x50=500,
000
200,
000x10=2,
000,000

Jan28 Cash 600,

000
UnissuedOr
dinaryShar e 400,
000
SharePremi
um-Or dinar
yShare 200,
000
Issued40,
000or dinaryshar
esat
P15pershare

Comput
ati
on:
40,
000x15=600,000
40,
000x10=400,000
600,
000-400,
000=200,
000

Feb.14 Land 700,

000
Buil
ding 1,
100,
000
Uni ssuedOrdinar
yShar e 1,
200,
000
Shar ePr emi
um-Or dinaryShare 600,
000
Issued120,000or dinaryshar
esi
nexchange
oflandandbuilding

Comput
ati
on:120,000x10=1,200,
000
1,800,000-1,
200,
000=600,
000

Feb.24 Pr
ofessi
onalandLegal Fees 32,
000
Unii
suedOr dinar
yShar e 20,
000
SharePremi um-OrdinaryShare 12,
000
I
ssued2,000or di
narysharesatP16per
shar
einexchangef orl
egalser
vices

Comput
ati
on:
2,000x16=32,000
2,000x10=20,000
32,000-20,
000=12,000

Sept
.12Cash 212,
000
Pref
erenceSubscri
pti
onReceivabl
e 318,
000
Subscri
bedPref
erenceShare 500,
000
SharePremi
um-Pr ef
erence 30,
000
Recei
vedsubscri
pti
onatP53pershar e
and40%downpay mentont hesubscri
pti
onpri
ce
 Comput
ati
on:
10,
000x53=530,000
530,
000x40%=212,000
530,
000-212,
000=318,000
10,
000x50=500,000
530,
000-500,
000=30,000

Oct
.1 Cash 318,000
Pr
eferenceSubscr
ipt
ionRecei
vabl
e 318,
000
Coll
ectedthebal
anceonthesubscr
ipt
ionpr
ice

Subscri
bedPr efer
enceShare 500,
000
UnissuedPrefer
enceShare 500,
000
Issuedthestockcert
ifi
cateduet
oful
l
pay mentofthesubscri
pti
on

Comput
ati
on:
10,
000x53=530,
000
530,
000x60%=318,
000
10,
000x50=500,
000

REQUI
REMENTB:
•Tocomputefort hetotall
egalcapi
tal
Pr
eferenceShar e
Aut hori
zed 10,
000shares P500,
000
Less: Unissued 0 0
Issued: 10,
000shares P500,
000

Or
dinaryShare
Authori
zed 200,
000shar
es P2,
000,
000
Less:Unii
sued 38,
000shares 380,
000
Issued 162,
000shar
es 1,
620,
000

TOTALLEGALCAPI
TAL ₱2,
120,
000

•Tocomputeforthetot
aladdi
tionalpai
dincapi
tal
SharePremium-Ordi
naryShare P812,
000
SharePremium-Pref
erenceShare 30,
000

TOTALADDI
TIONALPAI
DINCAPI
TAL ₱842,
000

•Tocomputefort hetotalpaidincapit
al
Pref
erenceShar e
Aut hori
zed 10,000shares P500,
000
Less: Unissued 0 0
Issued: 10,
000shares P500,
000
Ordi
naryShar e
Aut hori
zed 200,000shares P2,
000,
000
Less: Unii
sued 38, 000shares 380,
000
Issued 162,000shares 1,
620,
000
SharePremi um-Or di
naryShare 812,
000
SharePremi um-PreferenceShare 30,
000

TOTALPAI
DINCAPI
TAL ₱2,
962,
000
PROBLEM 4:
Goodwi
llCor porati
onwasaut hori
zedt oi ssue60, 000P100parv al
ueor dinaryshar ecapi t
alon
November3,2013.Thef ollowingar eshar ecapi taltransact i
onscompl et
eddur ingthemont hof
November.
•Nov ember4: I
ssued9, 000shar est oDav idatpar .
•Nov ember7: Receiv edsubscr i
pt ionf r
om Ramosf or5,500shar esatP120pershar e.
•Nov ember11: Recei vedsubscr ipt i
onf rom Var gasfor6, 000shar esatP125pershar e.
•Nov ember15: Collect edinf ull
t hesubscr ipti
onofRamosandshar ecerti
ficatewas
correspondinglyissued
•Nov ember21: Issued1, 000shar esi nexchangeofmachi nerywi t
hequivalentcashpr iceof
P125,000
•Nov ember22: Recei vedf ullpay mentf rom Var gas
•Nov ember24: Recei vedst atementofaccountf ortheser vi
cesr enderedbyDel gadofordraft
ing
andf i
li
ngtheAr ticlesofI ncor por ati
onandt hecor porateby -l
aws.Thebi llisfor60,000which
i
sset tl
edbyi ssuing500or dinar yshar es.
•Nov ember30: Ther emai ningshar eswer esubscr i
bedbyBaut i
staatP130pershar e.The
corporati
oncol l
ect ed40%oft hesubscr ipt
ionprice,thebal anceispay ableonorbef or
e
January31, 2014.

Requi
red:
A.Jour nali
zetheforegoingtr
ansacti
onsusingthememor andum entrymethod.
B.Pr eparethecontr
ibutedcapit
alsecti
onofthestatementoffinanci
alposi
ti
onatDecember31,
2013assumi ngthattherewerenoot hert
ransact
ionsthatoccuredduri
ngDecemberrel
ati
ng
tosharecapital
.

SOLUTIONSANDANSWERS
REQUIREMENTA

2013
Nov.3Memo:
Aut
hor
izedt
oissue60,
000,
P100parv
alueor
dinar
yshar
e

4Cash 900,
000
Ordinar
yShar
eCapit
al 900,
000
Issued9,
000shar
esatpart
oDav
id

Comput
ati
on:
9,000x100=900,
000

7Subscri
pti
onReceivable 660,
000
Subscri
bedOrdinaryShar e 550,
000
SharePremi
um-Or dinaryShare 110,
000
Recei
vedsubscriptionof5,500shar
es
atP120pershar ef r
om Ramos

Comput
ati
on:
5,500x120=660,000
5,500x100=550,000
660,000-550,
000=110,
000

11Subscri
pti
onReceivable 750,
000
Subscri
bedOrdinaryShare 600,
000
SharePremi
um-Or dinaryShare 150,
000
Recei
vedsubscript
ionof6,000shar
es
 atP125pershar
efr
om Var
gas

Comput
ati
on:
6,000x125=750,000
6,000x100=600,000
750,000-600,
000=150,
000

15 Cash 660,
000
Subscri
ptionRecei
vable 660,
000
Col
lectedtheful
lsubscr
ipt
ionf
rom Ramos

Subscr
ibedOrdi
naryShare 550,
000
Or
dinar
yShareCapital 550,
000
I
ssuedsharecert
if
icat
eduet
oful
lpay
ment
ofsubscr
ipti
onofRamos

21Machi
nery 125,
000
Ordinar
yShareCapit
al 100,
000
SharePremium-Ordi
naryShare 25,
000
Issued1,
000sharesinexchangeofmachi
ner
y

Comput
ati
on:
1,000x100=100,000
125,
000-100,
000=25,000

22 Cash 750,
000
Subscr
ipti
onReceivabl
e 750,
000
Recei
v edtheful
lpaymentofsubscr
ipt
ion
f
rom Vargas

Subscri
bedOrdi
naryShare 600,
000
Ordinar
yShar
eCapital 600,
000
I
ssuedsharecert
if
icat
eduetoful
lpay
ment
ofsubscr
ipt
ionfrom Var
gas

24 Pr
ofessi
onalandLegalFees 60,
000
Ordi
naryShareCapit
al 50,
000
SharePremium-Ordi
naryShare 10,
000
Recei
ved500sharesinexchangef
orl
egal
ser
vicefr
om Del
gado

Comput
ati
on:
500x100=50, 000
60,
000-50,
000=10,000

30 Cash 1,976,
000
Subscri
ptionReceivabl
e 2,964,
000
Subscr i
bedOrdinar
yShare 3,
800,
000
SharePr emium-Ordinar
yShare 1,
140,
000
Receivedsubscri
pti
onfrom Baut
ist
aandcol
l
ected
t
he40%oft hesubscri
pti
onpri
ce

Comput
ati
on:
38,000x130=4,940,000
4,940,
000x40%=1, 976,
000
4,940,
000-1,
976,
000=2, 964,
000
38,000x100=3,800,000
 4,
940,
000-3,
800,
000=1,
140,
000

REQUI
REMENTB

Shar
ehol
der
s'Equi
ty

Contr
ibutedCapi t
al:
Ordinar
yShar eCapit
al,
P100par
,60,
000shar
es
authorized,
22,000i
ssued P2,
200,
000
SubscribedShareCapit
al 3,
800,
000
Less:Subscripti
onRecei
vabl
e (2,
964,
000)
SharePr emium 1,
435,
000

Tot
alCont
ri
but
edCapi
tal P4,
471,
000

PROBLEM 5:
Thepart
nershi
pofDary
landEmi
l
yhadt
hef
oll
owi
ngst
atementoff
inanci
alposi
ti
onaccount
sasof
December31,2013.

Cash P240,
000
AccountsReceivable 200,
000
Merchandi
seI nv
ent or
y 280,
000
Equi
pment 160,
000
AccumulatedDepr eci
ati
on-Equi
pment (16,
000)
AccountsPayable 344,
000
Daryl
,Capi
tal 280,
000
Emil
y,Capital 240,
000

Thepart
nersagr eedt oincorporat et hebusi
ness,r egi
sterthesameasCooki eBarCor por at
ionand
havethenew cor porati
onabsor bal ltheassetsandassumet heliabil
it
iesofthepartnershi
p,aft
er
gi
vi
ngeffecttothef oll
owingadjust ment s.
•Anallowancef oruncollectibleaccountsofP20, 000wi l
lbeprovided.
•Themer chandi sei
nventor ywi l
l beadj
ustedtoi t
sfairmarketvalueofP320,000.
•Theaccumul ateddepreciationshallbeincreasedbyP6, 000tobr i
ngthecarry
ingvalueofthe
equipmentt oi t
sfairval
ue.

Shareswereissued,atpar
,equali
namountt
othef
airmar
ketv
alueoft
henetasset
str
ansf
err
edt
o
thecorpor
ati
on.

Threeotheri
ncor
por
ator
scont
ri
but
edt
otalcashofP300,
000i
nexchangef
ort
hecor
por
ati
on'
sshar
e
capit
al

Requi
red:
A.Pr eparetheentr
iesi
nthebooksofthepart
nershi
pofDarylandEmil
yasaresul
tofthe
foregoing.
B.Pr eparetheentr
iesi
nthebooksoftheCookieBarCorpor
ati
on.
C.Pr eparethestat
ementoffi
nanci
alposi
ti
onforCookieBarCorpor
ati
on,
immediat
elyaf
teri
ts
organizati
on.
SOLUTIONSANDANSWERS
REQUIREMENTA

Mer
chandiseInv
entory 40,
000
Al
lowanceforUncollect
ibl
eAccount s 20,
000
Accumulat
edDepr eciat
ion 6,
000
Daryl
,Capi
tal(
14,000x280, 000/
520,000) 7,
538
Emily
,Capit
al(14,
000x240, 000/520,
000) 6,
462
Reval
uati
onofAsset s

Comput
ati
on:
All
owanceforUncollect
ibleAccount
s (
20,
000)
Merchandi
seInventory(320,
000-280,000) 40,
000
Accumulat
edDepr eciat
ion (6,
000)
TOTALADJUSTMENTSONTHENETASSETS 14,
000

Daryl Emily Tot

al
Capi
talbef
oreadj
ust
ment
s 280,
000 240,
000 520,
000
Adj
ustments. 7,538 6,
462 14,
000
CAPI
TALAFTERADJUSTMENTS 287,
538 246,
462 534,
000

Daryl
,Capi
tal 287,
538
Emil
y,Capital 246,
462
Al
lowancef orUncollect
ibl
eAccount s 20,
000
AccumulatedDepr eciat
ion 22,
000
AccountsPay able 344,
000
Cash 240,
000
Account sReceivable 200,
000
Mer chandiseInventor
y 320,
000
Equi pment 160,
000
Tocloset heaccountsinthebooksofDaryl
andEmi lyandtransfer
redit
snetassets
inthebooksofCooki eBarCorporat
ion

REQUI
REMENTB

Cash(240,000+300, 000) 540,

000
AccountsRecei vable 200,000
MerchandiseInvent ory 320,000
Equi
pment( 160,000-22, 000) 138,000
All
owancef orUncoll
ecti
bleAccounts 20,
000
Account sPay abl
e 344,
000
ShareCapi t
al 834,
000
I
nv estmentofsharesinCooki eBarCorporat
ion
plust hecontr
ibut
ionofthreeotheri
ncorporat
ors
REQUI
REMENTC

Cooki
eBarCorporati
on
St
atementofFi
nanci
al Posi
ti
on
December31,2013

Assets
Cur
rentAssets
Cash P540,
000
AccountsReceivable 200,000
Less:All
owancef orUncol
l
ect
ibl
eAccounts (
20,000) 180,
000
MerchandiseInv
ent or
y 320,
000
Total
CurrentAssets P1,
040,
000

Non-
CurrentAsset
s
Equipment 138,
000

Tot
alAsset
s P1,
178,
000

Li
abi
l
iti
es
Cur
rentLi
abil
it
ies
AccountsPayabl
e 344,
000
Total
Cur r
entLi
abi
li
ti
es 344,
000

Shar
ehol
der
s'Equi
ty

Cont
ri
butedCapital
ShareCapital 834,
000
TotalShar
eholder
s'Equi
ty 834,
000

Tot
alLi
abi
l
iti
esandShar
ehol
der
s'Equi
ty P1,
178,
000

DISCLAI
MER:SOMEQUESTIONSPROVI DEDINTHISMATERIALWEREADAPTEDFROM DI FFERENT
AUTHORS AND PROFESSORS OF BASIC ACCOUNTI
NG.THIS DOCUMENT SHALL SERVE AS A
REVIEW MATERI
ALONLYANDDONOTUSETHI SFORANYUNNECESSARYACTSSUCHSENDI NG
THIS TOOTHERSINEXCHANGEOFPAYMENT.THEAUTHOROFTHI SMATERIALWANTSTOHELP
THOSESTUDENTSWHO HAVEDI FFI
CULTIESIN UNDERSTANDI
NG ACCOUNTING TOPI
CS.ALSO,
THISMATERIALWILLSOMEHOW HELP STUDENTSI NIMPROVING THEI
R KNOWLEDGEI N THE
WORLDOFACCOUNTI NG.GOODLUCKANDGODBLESS

Pr
epar
edby :
NIXOND.TORRESJR.
Bachel
orofSciencei
nAccountancy(
BSA)st
udent
SanMateoMuni ci
palCol
lege
TESDANCIIIBookkeepi
ngPasser