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  • Problem 2: 1. Memorandum Method

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    Ma Charmaine Felisilda
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    This document shows journal entries for recording share capital transactions using the memorandum method and journal entry method. It records seven transactions: 1) Initial share subscriptions, 2) Share issuance costs, 3) Acquisition of treasury shares, 4) Reissue of treasury shares, 5) Acquisition of additional treasury shares, 6) Retirement of treasury shares, and 7) Distribution of dividends to shareholders. Debits and credits are provided to record the transactions under both methods.

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    Original Title

    AE13 Activity 19

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    This document shows journal entries for recording share capital transactions using the memorandum method and journal entry method. It records seven transactions: 1) Initial share subscriptions, 2) Share issuance costs, 3) Acquisition of treasury shares, 4) Reissue of treasury shares, 5) Acquisition of additional treasury shares, 6) Retirement of treasury shares, and 7) Distribution of dividends to shareholders. Debits and credits are provided to record the transactions under both methods.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    7 views3 pages

    Problem 2: 1. Memorandum Method

    Uploaded by

    Ma Charmaine Felisilda
    This document shows journal entries for recording share capital transactions using the memorandum method and journal entry method. It records seven transactions: 1) Initial share subscriptions, 2) Share issuance costs, 3) Acquisition of treasury shares, 4) Reissue of treasury shares, 5) Acquisition of additional treasury shares, 6) Retirement of treasury shares, and 7) Distribution of dividends to shareholders. Debits and credits are provided to record the transactions under both methods.

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    © All Rights Reserved
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    of 3

    Problem 2:

    1. Memorandum Method
    a. Memo entry- the authorized capitalization is P3,000,000 divided into
    100,000 shares with par value share of P30.

    b. Cash 187,500
    Subscription receivable 562,500
    Subscribed share capital 750,000

    c. Cash 75,000
    Subscribed receivable 75,000

    Subscribed share capital 225,000


    Share capital 225,000

    d. Cash 600,000
    Share capital 450,000
    Share premium 150,000

    e. Subscription receivable 500,000


    Subscribed share capital 300,000
    Share premium 200,000

    f. Cash 500,000
    Subscription receivable 500,000

    Subscribed share capital 300,000


    Share capital 300,000

    Journal entry method:


    a. Unissued share capital 3,000,000
    Authorized share capital 3,000,000

    b. Cash 187,500
    Subscription receivable 562,500
    Subscribed share capital 750,000

    c. Cash 75,000
    Subscribed receivable 75,000

    Subscribed share capital 225,000


    Unissued Share capital 225,000

    d. Cash 600,000
    Unissued Share capital 450,000
    Share premium 150,000

    e. Subscription receivable 500,000


    Subscribed share capital 300,000
    Share premium 200,000

    f. Cash 500,000
    Subscription receivable 500,000

    2. ) Share Issuance Costs


    Cash 120,000
    Share capital 20,000
    Share premium 100,000

    3.) Treasury shares 150,000


    Cash 150,000

    Retained earnings- appropriated 30,000


    Retained earnings- unrestricted 30,000

    4.) Cash 45,000


    Treasury shares 30,000
    Share premium-treasury shares 15,000

    Retained earnings-appropriated 30,000


    Retained earnings-unrestricted 30,000

    5.) Cash 20,000


    Retained earnings 10,000
    Treasury shares 30,000

    Retained earnings-appropriated 30,000


    Retained earnings-unrestricted 30,000

    6.) Treasury shares (5,000 x P15) 75,000


    Cash 75,000

    Share capital 100,000


    Share premium- original issuance 25,000
    Treasury shares 75,000
    Share premium-retirement 50,000

    7.) Share capital 100,000


    Share premium-original issuance 25,000
    Retained earnings 125,000
    Cash 250,000

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