BSA 101 – FINANCIAL ACCOUNTING AND REPORTING

TASK 1 WEEK 13 - 100 points

Instruction: Write your name and answer in a journal/paper. Submit a MAXIMUM OF 6 PICTURES
ONLY.
Note: Follow policy on submission.

Problem 1

Magellan Centennial Hotel was organized and incorporated in January of 2020 with an authorized share
capital consisting of 6% preference shares of 50,000 and 100,000 ordinary shares at par value of P25 and
P75 respectively. The incorporators made their corresponding subscriptions in shares and payments as
follows:

Incorporators Number of Shares Subscribed Payments Received

Preference Ordinary Preference Ordinary
Cedric Naranjo 4,000 12,000 P 30,000 P270,000
Rose Jacalan 3,000 11,000 22,500 206,000
Mariz Valdez 5,000 10,000 25,000 150,000
Sharon Gabriel 6,000 9,000 37,000 135,000
P114,500 P761,000
Other transactions follow:
January 2 The Corporate Treasurer deposited at Banco de Oro the amount corresponding to
payments of the above incorporators and received certificate of bank deposits.
January 15 Withdrew the amount of P7,000 in payment of incorporation fees and other expenses
relative to the incorporation process.
January 25 Paid cash to Atty. Lucilo Sarona for legal services rendered in preparing incorporation
papers, P3,000.
February 2 Elena Lucas subscribed 300 shares of 6% preference at P30 and 500 ordinary shares
at par value, making a 20% down payment for each of the share, P9,300.
February 20 Sofia Godin subscribed 1,200 ordinary shares in exchange for a lot to be utilized as
a parking space of the hotel. The fair market of the lot was P100,000. A share
certificate was issued.
March 3 Issued for cash to Zola Camba, for 600 preference shares at P35 and 100 ordinary
shares at P80. A share certificate was issued,
April 15 Collected P7,200 from Elena Lucas representing her full payment of 6% preference
shares subscription. A share certificate was issued for preference share.
December 31 Net income for the year amounted to P1,200,000.
December 31 The corporation acquired 100 shares of its own ordinary shares at P90.

REQUIRED:
1. Record the transactions using the Memorandum Method. (Write in the General Journal)
2. Record the transactions using the Journal Entry Method. (Write in the General Journal)
3. Prepare the Shareholders’ Equity section of the Statement of Financial Position for the two methods
used. (Write in a paper).