Problem

“Robert Dennis together with other investors formed a corporation to provide

concrete construction work. Their jobs typically involve building parking lots, drives,
and foundations. The company provided the following information about transactions
occurring during the first Year of operation. Evaluate the transactions and prepare
journal entries for this activity. Also prepare 5 sets of comparative financial statements
using excel.

The company has an authorized capital of P200,000,000 divided into 200,000

ordinary shares at P1,000 par value. There are 40 employees hired by the corporation in
January of the same year, each employee receives a monthly wage of P15,000 to be paid
every 5th and 20th day of the month. Monthly electric bill has an average cost of P30,000
a month. The billing was received on the month covered therefrom but is paid next
month from the receipt of the bill. Insurance premiums on building and materials is due
and is paid every end of the month with a premium cost of P15,000. Rent of the office
building used by the corporation costs P100,000 monthly. The company on January 1
had finished constructing a building for supplies warehousing at a cost of P5,000,000
which has an estimated useful life of 20 years to be depreciated using the straight-line
method. Based on Aging of account receivable, the company estimates that 5% of which
cannot be collected and the end of every year.

Jan. 2, 2020, Robert Dennis, together with others invested P100,000,000 cash
in exchange for 100,000 ordinary shares of stock at a price of P1,500 per share
of the newly formed corporation. In addition to finance its operation, the
corporation obtained a 5-year loan from a bank in the amount of P30,000,000
at 12% annual interest rate. Interest is payable monthly every 2 nd day of the
month.

Jan. 4, 2020 Purchased equipment on account for P7,000,000.

March. 12, 2020 Received P50,000,000 from customers for services
rendered.
June. 15, 2020 Received a bill for construction supplies
used in the amount of P20,000,000.

July. 18, 2020 Provided P50,000,000 of services on

 account.

August 1, 2020 Collected 60% of the amount due for the

work provided on July 18.

September 2020 Paid 40% of the amount due on the

equipment purchased on January 4.

October 13, 2020 Purchased construction supplies for cash

in the amount of P 5,000,000. Supplies
amounting to P3,500,000 was used using
the construction projects.
November 5, 2020 Some investor surrendered its certificate
of stocks covering 3,000 shares paid by
the corporation at P900 per share. The
corporation however reissued 2,000
shares at a price of P800 per share. The
corporation also retired the remaining
1,000 shares.
December 15, 2020 The company declared dividends to be paid
on January 5 in the amount of P2,000,000.

Year 2021

Jan. 4, 2021 Purchased equipment on account for P1,000,000.

March. 12, 2021- Received P40,000,000 from customers for services
rendered.
June. 15, 2021 Received a bill for construction supplies
used in the amount of P10,000,000.

July. 18, 2021 Provided P30,000,000 of services on

account.

August 1, 2021 Collected 60% of the amount due for the

work provided on July 18.

September 2021 Paid 40% of the amount due on the

equipment purchased on January 4.

October 13, 2021 Purchased construction supplies for cash

in the amount of P 5,000,000. Supplies
amounting to P3,500,000 was used using
the construction projects.
November 5, 2021 Some investor surrendered its certificate
of stocks covering 500 shares paid by the
corporation at P900 per share. The
corporation however reissued 200 shares
at a price of P800 per share. The
corporation also retired the remaining
100 shares.
December 15, 2021 The company declared dividends to be paid
on January 5 in the amount of P2,000,000.