Partnership and Corporation Problem With Solutions

FORMATION
On January 1, 2018 123 Corporation is authorized by its charter to issue 10,000 shares of 10% preferen
shares of ordinary shares at a par value of P50 per share. The incorporation papers were already appr
Hereunder are the names of the three(3) incorporators who signed the Articles of Incorporation and m
Preference
No. of shares Par Value Subscription Subscription
Receivable Payment
E. Panganiban 2,000 P150 P300,000 P90,000

E. Butlig 1,000 P150 150,000 75,000
L. Gravino 750 P150 112,500 33,750
3,750 P562,500 P198,750
Other transactions follows:

Jan. 2 The Corporate Treasurer deposited at the Land Bank of the Philippines the amount corresp
and received certificate of bank deposit.
5 Withdrew the amount of P20,000 for the incorporation fees, cost of printing certificates an
process.
8 Issued 1,000 ordinary shares to Atty. Pagsuguiron for legal services rendered amounting to
10 Gevera subscribed 1,500 preference shares at P150 per share and 2,000 ordinary shares at
12 Issued 1,500 preference shares and 3,000 ordinary shares at par value to Jarabelo for cash
15 E. Butlig, one of the incorporators paid her preference and ordinary subscription balance in
20 Collected 40% payment of E.Panganiban preference and ordinary subscription.
25 Rose Ann Cortis acquired 3,000 ordinary shares in exchange for a parcel of land . The fair m
certificate.
Required:
1. Record the transaction in the General Journal consisting of authorization subscriptions,
OPERATION
Assume the following corporate data:
123 Corporation reported the following shareholder's equity on February 1, 2018:

Ordinary Share P50 par, 30,000 shares authorized,
10,000 shares issued and outstanding
Share Premium - Ordinary
Accumulated Profits (Losses) appropriated for building construction
Accumulated Profits (Losses)
Total Shareholders' Equity
Required:
1. Prepare journal entries to record the following transactions related to Accumulated Pro
1. Reported net profit of the year amounting P 1,500,000

2. 123 Company reacquired 2,000 shares at P60 per share to be held as treasury. No other
3. 123 Company appropriated 200,000 of Accumulated Profits (Losses) that will serve as a c
4. Also, 500,000 of cash was restricted for the retirement bond payable to 2021.
5. The construction of building was completed during sa the year at cost of P800,000
2. Compute the ending balance of Accumulated Profits (Losses) as of February 28, 2018
DISTRIBUTION OF DIVIDENDS
123 Corporation Board of Directors declared 500,000 cash Dividends on August 10, 2018 payable on
Required:
1. Prepare Journal entry to declare and pay dividends.
123 Corporation has the following selected accounts in its Shareholders equity.
10% Preference Shares, P150 par, 10,000

authorized shares, 2,000 shares issued and outstanding
Ordinary Share P50 par, 30,000 shares authorized
Share Premium - Preference
The board failed to prepare Dividends for the past 2 years. The current year results of operations gav
Required:
1. Compute for Dividends per share for Preference Share and ordinary Share assume that
A. Non cumulative and non participating

B. Cumulative and non participating
C. Non Cumulative and Participating
D. Cumulative and Participating
The following data refers to the Shareholders' Equity section of 123 Corporation at December 31, 20
10% Preference Shares, P150 par, 10,000 authorized shares,

2,000 shares issued and outstanding.
Share Premium- Ordinary Shares
Ordinary Share- P50 par, 30,000 shares authorized,
Accumulated Profits and Losses for the year
Appropriated
Unappropriated Accumulated Profits and Losses Beginning
Appropriated for Treasury Share
Appropriated for Contingencies
Appropriated for Bond Retirement
Appropriated for building construction to Unappropriated
Accumulated Profits and Losses
Unappropriated
Unappropriated Accumulated Profits and Losses Beginning
Unappropriated Accumulated Profits and Losses during the year
Cash dividends declared
Required:
1. Statement of Accumulated Profits (Losses)

2. Shareholder’s' Equity as of December 31,2018
3. Statement of Changes in Equity for the year ended December 31, 2018
4. Statement of Financial Position
Note: Upon preparation, assume that the 123 corporation doesn't declare any dividends f
ssue 10,000 shares of 10% preference shares at par value of P150 per share and 30,000
poration papers were already approved by the Securities and Exchange Commission.
the Articles of Incorporation and made subscriptions and payment to wit:
Ordinary
No. of Shares Par Value Subscription Subscription
Receivable Payment
E. Panganiban 1,300 P50 P65,000 P26,000

E. Butlig 3,000 P50 150,000 75,000
L. Gravino 2,500 P50 125,000 62,500
6,800 P340,000 P163,500
the Philippines the amount corresponding to payment of the above incorporators
fees, cost of printing certificates and other expense relative to the incorporation
gal services rendered amounting to P50,000 and issued share certificate.
share and 2,000 ordinary shares at P50 per share.
es at par value to Jarabelo for cash and issued a share certificate.
nd ordinary subscription balance in full and a share certificate was issued.
d ordinary subscription.
ange for a parcel of land . The fair market value of land was P180,000and issued share
ting of authorization subscriptions, collections, issuance of certificate, etc using Memorandum Entry methods.
ebruary 1, 2018:
P500,000
P100,00
P500,00
P350,00
P1,450,000
actions related to Accumulated Profits (Losses)
re to be held as treasury. No other transactions occurred during the year pertaining to treasury share.
Profits (Losses) that will serve as a contingency fund.
nt bond payable to 2021.
a the year at cost of P800,000
sses) as of February 28, 2018
nds on August 10, 2018 payable on October 18 to shareholders of record on September 12.
olders equity.
P300,00
P500,000
P100,000
P150,000
P1,180,000
rrent year results of operations gave the board reasons to declare cash Dividends of 500,000
re and ordinary Share assume that Preference Share is:
23 Corporation at December 31, 2018
P300,000
P100,000
P500,000
P150,000
P1,500,000
(P820,000)
P500,000
P120,000
P200,000
P500,000
P500,000
(1,530,000)
P350,000
P1,180,000
P500,000
cember 31, 2018
on doesn't declare any dividends for the year 2018

try methods.
On January 1, 2018 123 Corporation is authorized by its charter to issue 10,000 shares of 10% preferenc
shares of ordinary shares at a par value of P50 per share. The incorporation papers were already appro
Hereunder are the names of the three(3) incorporators who signed the Articles of Incorporation and m
Preference
No. of shares Par Value Subscription Subscription
Receivable Payment
E. Panganiban 2,000 P150 P300,000 P90,000

E. Butlig 1,000 P150 150,000 75,000
L. Gravino 750 P150 112,500 33,750
3,750 P562,500 P198,750
Other transactions follows:

Jan. 2 The Corporate Treasurer deposited at the Land Bank of the Philippines the amount c
and received certificate of bank deposit.
5 Withdrew the amount of P20,000 for the incorporation fees, cost of printing certifica
process.
8 Issued 1,000 ordinary shares to Atty. Lory Pagsuguiron for legal services rendered am
10 Gevera subscribed 1,500 preference shares at P150 per share and 2,000 ordinary sh
12 Issued 1,500 preference shares and 3,000 ordinary shares at par value to Jarabelo fo
15 E. Butlig, one of the incorporators paid her preference and ordinary subscription bal
20 Collected 40% payment of E.Panganiban preference and ordinary subscription.
25 Rose Ann Cortis acquired 3,000 ordinary shares in exchange for a parcel of land . The
certificate.
Required:
1. Record the transaction in the General Journal consisting of authorization subscri
Journal Entries
ANSWER Jan 1 123 Corporation is authorized to issue 10,000 preference shares at par value of P15
Subscription Receivable- Preference 562,500
Subscription Receivable-Ordinary 340,000
Subscribed Share Capital-Preference
Subscribed Share Capital-Ordinary
To record subscriptions from incorporators
2 Cash in Bank 362,250

Subscription Receivable- Preference
Subscription Receivable-Ordinary
To record collection from incorporators subscription
5 Organization Cost 20,000

Cash in Bank
To record payment of organization expenses
8 Organization Expense 50,000

Share Capital-Ordinary
Issued Share Capital for services rendered.
10 Subscription Receivable- Preference 225,000

Issued 1,000 preference shares and 2,000 ordinary s
12 Subscription Receivable- Preference 225,000

To record subscription of 1,000 preference shares an
Cash in Bank 375,000

To record payment of subscription
Subscribed Share Capital-Preference 225,000

Subscribed Share Capital-Ordinary 150,000
Share Capital-Preference
To record issuance of certificate.
Collected in full the balance of incorporators subscri
Subscribed Share Capital-Preference 150,000


To record 40% collection from incorporators subscri
25 Land 180,000
Share Premium
Issuance of share capital for land.
Assume the following corporate data:
123 Corporation reported the following shareholder's equity on February 1, 2018:
Ordinary Share P50 par, 30,000 shares authorized,

Accumulated Profits (Losses) appropriated for building construction
Required:
1. Prepare journal entries to record the following transactions related to Accumula
1. Reported net profit of the year amounting P 1,500,000

2. 123 Company reacquired 2,000 shares at P60 per share to be held as treasury. No other t
3. 123 Company appropriated 200,000 of Accumulated Profits (Losses) that will serve as a co
4. Also, 500,000 of cash was restricted for the retirement bond payable to 2021.
5. The construction of building was completed during sa the year at cost of P800,000
Journal Entries
ANSWER 1 Income Summary P1,500,000

Accumulated Profits (Losses) P1,500
2 Accumulated Profits (Losses) P120,000

appropriated for treasury share P1200,

Accumulated Profits (Losses) appropriated
for contingencies P200,00

Accumulated Profits (Losses) appropriated
for bond retirement P500,00
5 Accumulated Profits (Losses) appropriated

for building construction P500,000
2. Compute the ending balance of Accumulated Profits (Losses) as of February 28, 2018
ANSWER The ledger of Accumulated Profits (Losses) will have the following pos
Accumulated
Profits (Losses)
2. P120,000
3. P200,000
4. P500,000
P820,000
123 Corporation Board of Directors declared 500,000 cash Dividends on August 10, 2018 payable on O
Required:
1. Prepare Journal entry to declare and pay dividends.
ANSWER 1.) Date of Declaration

Cash Dividends Payable.
2.) Date of Shareholders Record
No Entry
3.) Date of Payment
Cash Dividends Payable P500,000

Cash
123 Corporation has the following selected accounts in its Shareholders equity.
10% Preference Shares, P150 par, 10,000

authorized shares, 2,000 shares issued and outstanding
Ordinary Share P50 par, 30,000 shares authorized
The board failed to prepare Dividends for the past 2 years. The current year results of operations gav
Required:
1. Compute for Dividends per share for Preference Share and ordinary Share assum
A. Non cumulative and non participating

ANSWER A. Non cumulative and non participating
Cash Dividend is distributed as follows:
Preference
Outstanding Share Capital P300,000
Current Preference Dividends P50,000
[500,000 × 10%]
Remainder to Ordinary
[500,000 - 50,000]
Total P50,000
Dividends Per Share P16
Cash Dividend is distributed as follows
Preference
Preference Dividends in Arrears 100,000
[500,000 × 10% × 2yrs].
[ 300,000 × 10%]
Remainder to Ordinary
[500,000 - 100,000 - 30,000]
Total P130,000
Dividends Per Share P43.33
Preference
[ 300,000 × 10%]
Current Ordinary Dividends
[ 500,000 × 10%]
Remainder to Participation
[500,000 - 30,000 - 50,000]
Preference. 300,000/800,000 × 420,000. P157,500
Ordinary 500,000/ 800,000 × 420,000.
Total P187,500
Preference
Preference Dividends in Arrears P100,000
[500,000 × 10% × 2yrs]
[ 300,000 × 10%]
Current Ordinary Dividends
[ 500,000 × 10%]
Remainder to Participation
[500,000 - 100,000 - 30,000 - 50,000]
Preference. 300,000/800,000 × 320,000 P120,000
Ordinary 500,000/ 800,000 × 320,000
Total P250,000
0 shares of 10% preference shares at par value of P150 per share and 30,000
apers were already approved by the Securities and Exchange Commission.
es of Incorporation and made subscriptions and payment to wit:
Ordinary
No. of Shares Par Value Subscription Subscription
Receivable Payment
E. Panganiban 1,300 P50 P65,000 P26,000

E. Butlig 3,000 P50 150,000 75,000
L. Gravino 2,500 P50 125,000 62,500
6,800 P340,000 P163,500
Philippines the amount corresponding to payment of the above incorporators
s, cost of printing certificates and other expense relative to the incorporation
legal services rendered amounting to P50,000 and issued share certificate.
are and 2,000 ordinary shares at P50 per share.
at par value to Jarabelo for cash and issued a share certificate.
ordinary subscription balance in full and a share certificate was issued.
rdinary subscription.
e for a parcel of land . The fair market value of land was P180,000and issued share
g of authorization subscriptions, collections, issuance of certificate, etc using Memorandum Entry methods.
shares at par value of P150 per share and 30,000 ordinary shares at a par value of P50 per share.
562,500
340,000
om incorporators
198,750
163,500
ncorporators subscription
20,000
anization expenses
50,000
rvices rendered.
225,000
100,000
hares and 2,000 ordinary shares at par value.
225,000
150,000
1,000 preference shares and 3,000 ordinary shares at par value.
225,000
150,000
225,000
150,000
75,000
75,000
e of incorporators subscription.
150,000
150,000
120,000
26,000
rom incorporators subscription.
150,000
30,000
P500,000
P100,00
P500,00
P350,00
P1,450,000
tions related to Accumulated Profits (Losses)
eld as treasury. No other transactions occurred during the year pertaining to treasury share.
sses) that will serve as a contingency fund.
ayable to 2021.
at cost of P800,000
P1,500,000
P1,500,000
P1200,000
P200,000
P500,000
P500,000
February 28, 2018
ill have the following posting:
cumulated
fits (Losses)
P1,500,000 1.
P500,000 5.
P20,000,000
P1,180,000
ust 10, 2018 payable on October 18 to shareholders of record on September 12.
P500,000
P500,000
P300,00
P500,000
P100,000
P150,000
P1,180,000
results of operations gave the board reasons to declare cash Dividends of 500,000
and ordinary Share assume that Preference Share is:

Ordinary Total
P500,000 P800,00
P50,000
P450,000 P450,000
P450,000 P500,00
P90
Ordinary Total
P500,000 P800,000
P100,000
P370,000 P350,000
P370,000 P500,000
P74
ed as follows:
Ordinary Total
P500,000 P800,000
P30,000
P50,000 P50,000
P157,500
P262,500 P262,500
P312,500 P500,000
P62.5
Ordinary Total
P500,000 P800,000
P100,000
P30,000
P50,000 P50,000
P120,000
P200,000 P200,000
P250,000 P500,000
P50
methods.
GENERAL JOURNAL
123 CORPORATION
General Journal
For the month of January
Date Account title and explanation Debit

2018
Jan 1 123 Corporation is authorized to issue 10,000 preference shares at par value
of P150 per share and 30,000 ordinary shares at a par value of P50 per share.
Jan 1 Subscription Receivable- Preference 562,500

To record subscriptions from incorporators
Jan 2 Cash in Bank 362,250

Collection from incorporators subscription
Jan 5 Organization Cost 20,000

Cash in Bank
To record payment of organization expenses
Jan 8 Organization Expense 50,000

Issued Share Capital for services rendered.

Issued 1,000 preference shares and 2,000 ordinary shares at par value.

To record subscription of 1,000 preference shares and 3,000 ordinary shares at par value.

To record payment of subscription
Jan 12 Subscribed Share Capital-Preference 225,000


Collected in full the balance of incorporators subscription.
Jan 15 Subscribed Share Capital-Preference 150,000


To record 40% collection from incorporators subscription.
Jan 25 Land 180,000

Share Premium
Issuance of share capital for land.
Account Name
Date
Jan. 2
Jan. 5
Credit Jan. 12
Jan. 15
t par value Jan. 20
per share. Sept. 12
Account Name
Date
562,500 Jan. 5
340,000
Account Name
Date
198,750 Jan. 8
163,500
Account Name
Date
20,000 Jan. 25
Account Name
50,000 Date
Jan. 1
Account Name
225,000 Date
100,000 Jan. 1
Jan. 2
Jan. 10
Jan. 12
Jan. 12
225,000 Jan. 15
150,000 Jan. 20
ary shares at par value.
Account Name
225,000 Date
150,000 Jan. 1
Jan. 10
Jan. 12
Jan. 12
Jan. 15
225,000
150,000
Account Name
Date
Jan. 12
75,000 Jan. 15
75,000
Account Name
Date
Jan. 1
150,000
150,000
Account Name
Date
Jan. 1
120,000 Jan. 2
26,000 Jan. 10
Jan. 12
Jan. 12
Jan. 15
150,000 Jan. 20
30,000
Account Name
Date
Jan. 1
Jan. 10
Jan. 12
Jan. 12
Jan. 15
Account Name
Date
Jan. 8
Jan. 12
Jan. 15
Jan. 25
Account Name
Date
Jan. 25
GENERAL LEDGER
Cash in Bank
Particulars Debit Credit Balance
Collection from incorporators subscription 362,250 P362250
Payment of organization expenses 20,000 342,250
Payment of subscription 375,000 717,250
Collected full balance of incorporator 150,000 867,250
40% collection from incorporator 146,000 P1013250
Cash dividends payment 500,000 P513250
Organization Cost
Payment of organization cost 20,000 20,000
Organization Expense
Share capital for service rendered 50,000 50,000
Land
Share capital for land 180,000 180,000
Authorized Share Capital- Preference

Authorized Share Capital- Preference 1,500,000 1,500,000

Subscription from incorporators 562,500 562,500
Collection from incorporators 198,750 363,750
Issued 1,000 preference shares 225,000 588,750
Subscription of 1,000 preference shares 225,000 813,750
40% collection from incorporator 120,000 393,750
Subscribed Share Capital- Preference

Issued 1,000 preference shares 225,000 787,500
Subscription of 1,000 preference shares 225,000 1,012,500
Issuance of certificate 225,000 787,500
Share Capital- Preference

Authorized Share Capital- Ordinary

Authorized Share Capital- Ordinary 1,500,000 1,500,000
Subscription Receivable- Ordinary

Collection from incorporators 163,500 176,500
Issued 2,000 ordinary shares 100,000 276,500
Subscription of 3,000 ordinary shares 150,000 426,500
40% collection from incorporator 26,000 175,500
Subscribed Share Capital- Ordinary

Issued 2,000 ordinary shares 100,000 440,000
Subscription of 3,000 ordinary shares 150,000 590,000
Share Capital- Ordinary

Share capital for service rendered 50,000 50,000
Share Premium
Cash Receipts Journal
Date Account Explanation Cash
credited Dr.
2018
Jan. 2 E. Panganiban Collection subscription 116,000
E. Butlig Collection subscription 150,000
L. Gravino Collection subscription 96,250
Jan. 12 P. Jarabelo Cash Subscription 375,000
Jan. 15 E. Butlig Full collection payment 150,000
Jan. 20 E. Panganiban 40% payment 146,000
Jan. 20 Total 1,033,250
Cash Disbursement Journal

Date Explanation Cash Accounts
Cr. Dr.
2018
Jan. 5 Org. Cost payment 20,000 20,000
Sept. 12 Cash Dividend payment 500,000 500,000
Sept. 12 Total 520,000 520,000
Subscription Other
Receivable accounts
Cr. Cr.
116,000
150,000
96,250
375,000
150,000
146,000
1,033,250
Subscriber's Ledger
Name: E. Panganiban
Address: xxx
Share Subscribed
Date No. of Shares No. of Shares Value

1-Jan P2,000 P300,000
P1,300 P65,000
Name: E. Butlig
Address: xxx
Share Subscribed
Date No.of shares No. of shares Value

1-Jan 1,000 P150,000
3,000 150,000
Name: L. Gravino
Address: xxx
Share Subscribed
Date No.of shares No. of shares Value

1-Jan 750 P112,500
2,500 125,000
Name: X. Gevera
Address: xxx
Share Subscribed
Date No. of shares No. of shares Value

1-Jan 1,500 P225,000
2,000 100,000
Name: Pheobe Joy Jarabelo

Address: xxx
Share Subscribed

1-Jan 1,500 P225,000
3,000 150,000
Shareholder's Journal
Date Transferred Certificate Cancelled

Ledger Cert.
Folio No.
8-Jan Atty. Lory Pagsuguiron

12-Jan Phoebe Joy Jarabelo
15-Jan E. Butlig
25-Jan Rose Ann Cortis

Shareholder's Ledger
Name: E. Butlig
Address: xxx
Certificate Cancelled
Date Journal Folio Certificate No No. Of Shares Date
15-Jan
Name: Atty. Lory Pagsuguiron

Address: xxx
8-Jan
Name: Rose Ann Cortis

Address: xxx
25-Jan
Name: Pheobe Joy Jarabelo

Address: xxx
12-Jan
Share Payment

2-Jan 600 P90,000
520 26,000
120,000
20-Jan 800 520 26,000
Share Payment

2-Jan 500 P75,000
1,500 75,000
75,000
15-Jan 500 1,500 75,000
Share Payment

2-Jan 225 P33,750
1,250 62,500
Share Payment

10-Jan 1,500 P225,000
2,000 100,000
Share Payment

12-Jan 1,500 P225,000
3,000 150,000
ficate Cancelled
No. Of Total No.
of Shares
Shares Received
1,000 1,000 P50,000

1,500
3,000 4,500 375,000
1,000
3,000 4,000 300,000
3,000 3,000 150,000
Share Payment
Journal Folio Certificate No. No. Of Shares
4,000
Share Payment
1,000
Share Payment
3,000
Share Payment
4,500
123 Corporation
Unadjusted Trial Balance
January 31,2018
Debit Credit
Cash in Bank P1,013,250
Subscription Receivable- Preference 393,750
Subscription Receivable- Ordinary 175,500
Land 180,000
Organization Cost 20,000
Organization Expense 50,000
Subscribed Share Capital- Preference P637,500
Subscribed Share Capital- Ordinary 290,000
Share Capital- Preference 375,000
Share Capital- Ordinary 500,000
Share Premium 30,000
P1,832,500 P1,832,500
Statement of Accumulated Profits (Losses)
Unappropriated Accumulated Profit (Loss)
February 1,2018 balance

Add: Profit of the year
Total
Add: Transfer to unappropriation for building construction
Less: Transfer to appropriation for treasury shares
Transfer to appropriation for contingency fund
Transfer to appropriation for bond retirement payable
Total Unappropriated Accumulated Profit (Losses)
Appropriated Profit (Loss)

For appropriation of treasury shares
For appropriation of contingency fund
For appropriation of bond retirement payable
Accumulated Profit (Loss), December 31,2018
Shareholders' Equity as of December 31,2018
Shareholders' Equity
Contribited Capital:
Share Capital:
10% Preference Share, P150 par value 10,000 shares issued and authorized
Ordinary Share, P50 par value 30,000 shares authorized
15,800 issued and outstanding
Share Premium
Additional Paid-In Ordinary
Total Contributed Capital
Accumulated Profit (Loss)
Unappropriated
Appropriated
Total Liabilities and Shareholders' Equity
Statement of Changes in Equity for the year ended December 31, 2018
123 Corporation
Statement of changes in Equity
For the year ended 31 December 2018
Share Capital
10%
Preference Ordinary
January 1,2018 P1,012,500 P790,000
February 1,2018 - -
Profit of the year - -
Transfer to unappropriation for building construction - -
Transfer to appropriation for treasury shares - -
Transfer to appropriation for contingency fund - -
Transfer to appropriation for bond retirement payable - -
P1,012,500 P790,000
Statement of Financial Position
123 Corporation
Statement of Financial Position
As of 31 December 2018
Assets
Current Assets:
Cash in Bank P3,363,250
Subscription Receivable-P 393,750
Subscription Receivable-O 175,500
Total Current Assets P3,932,500
Non-Current Assets:
Organization Cost P70,000
Land 180,000
Total Non-Current Assets P250,000
Total Assets P4,182,500
Book Value Per Share
The preference share has a liquidation value of 175 and dividends in the current year.
Preference Share
Liquidation Value, P175 × 6,750 shares
Current year dividend, 10% × P1,802,500 × 1
Preference Shareholders' Equity
Book Value Per Preference Share
Ordinary Share
Total Shareholders' Equity P4,182,500
Less: Preference Shares Equity -1,361,500
Ordinary Shareholders' Equity P2,821,000
÷ 15,800
P178.5443038 or
Book Value Per Ordinary Share P178.54
Earnings Per Share

Preference Share
Profit after tax
EPS =
Number of Shares Outstanding
P2,350,000 - 180,250
=
15,800
=P194.2879746835 or P194.29
P350,000
P1,500,000
P1,850,000
onstruction 500,000
P120,000 P2,350,000
200,000
ent payable 500,000
P1,530,000
P120,000
200,000
500,000
P820,000
P2,350,000
reholders' Equity
d authorized
P1,012,500
790,000 P1,802,500
P30,000 P30,000
P1,832,500
P1,530,000
820,000 P2,350,000
P4,182,500
P4,182,500
poration
hanges in Equity
d 31 December 2018
Share Premium Accumulated Profits (Losses)
10%
Preference Ordinary Unappropriated Appropriated Total
- P30,000 - - -
- - P350,000 - -
- - P1,500,000 - -
- - P500,000 - -
- - (P120,000) P120,000 -
- - (P200,000) P200,000 -
- - (P500,000) P500,000 -
- P30,000 P1,530,000 P820,000 P4,182,500
123 Corporation
ment of Financial Position
of 31 December 2018
Liabilities and Shareholders' Equity
Shareholders' Equity
Contributed Capital
Share Capital
10% Preference Share, P150 par value 10,000 shares authorozed,
6,750 shares issued and outstanding P1,012,500
Ordinary Share, P50 par value 30,000 shares authorized
15,800 issued and outstanding 790,000 P1,802,500
Share Premium
Additional Paid-In Ordinary P30,000 P30,000
Total Contribited Capital P1,832,500
Unappropriated P1,530,000
Appropriated 820,000 P2,350,000
Total Shareholders' Equity P4,182,500
Total Liabilities and Shareholders' Equity P4,182,500
s in the current year.
P1,181,250
180,250
P1,361,500
÷ 6,750
P201.7037037 or
P201.70
78.5443038 or
123 Corporarion
Work Sheet
For the Year Ended December 31,2018
Trial Balance Financial Position

Account Titles Debit Credit Debit Credit
Cash in Bank P1,013,250 P3,363,250
Subscription Receivable- Preference 393,750 393,750
Subscription Receivable- Ordinary 175,500 175,500
Land 180,000 180,000
Organization Cost 20,000 20,000
Organization Expense 50,000 50,000
Subscribed Share Capital- Preference P637500 P637,500
Subscribed Share Capital- Ordinary 290,000 290,000
Share Capital- Preference 375,000 375,000
Share Capital- Ordinary 500,000 500,000
Share Premium 30,000 30,000
Total P1,832,500 P1,832,500
Unappropriated 1,530,000
Appropriated 820,000
Total P4,182,500 P4,182,500

Partnership and Corporation Problem With Solutions

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FORMATION

E. Panganiban 2,000 P150 P300,000 P90,000

Other transactions follows:

20 Collected 40% payment of E.Panganiban preference and ordinary subscription.

Assume the following corporate data:

123 Corporation reported the following shareholder's equity on February 1, 2018:

Share Premium - Ordinary

Accumulated Profits (Losses) appropriated for building construction

Accumulated Profits (Losses)

Total Shareholders' Equity

1. Reported net profit of the year amounting P 1,500,000

10% Preference Shares, P150 par, 10,000

A. Non cumulative and non participating

10% Preference Shares, P150 par, 10,000 authorized shares,

1. Statement of Accumulated Profits (Losses)

E. Panganiban 1,300 P50 P65,000 P26,000

the Philippines the amount corresponding to payment of the above incorporators

gal services rendered amounting to P50,000 and issued share certificate.

share and 2,000 ordinary shares at P50 per share.

es at par value to Jarabelo for cash and issued a share certificate.

nd ordinary subscription balance in full and a share certificate was issued.

actions related to Accumulated Profits (Losses)

sses) as of February 28, 2018

23 Corporation at December 31, 2018

cember 31, 2018

on doesn't declare any dividends for the year 2018

E. Panganiban 2,000 P150 P300,000 P90,000

Other transactions follows:

20 Collected 40% payment of E.Panganiban preference and ordinary subscription.

2 Cash in Bank 362,250

5 Organization Cost 20,000

8 Organization Expense 50,000

10 Subscription Receivable- Preference 225,000

12 Subscription Receivable- Preference 225,000

Cash in Bank 375,000

Subscribed Share Capital-Preference 225,000

Subscribed Share Capital-Preference 150,000

20 Cash in Bank 146,000

Assume the following corporate data:

123 Corporation reported the following shareholder's equity on February 1, 2018:

Ordinary Share P50 par, 30,000 shares authorized,

Share Premium - Ordinary

Accumulated Profits (Losses) appropriated for building construction

Accumulated Profits (Losses)

Total Shareholders' Equity

1. Reported net profit of the year amounting P 1,500,000

ANSWER 1 Income Summary P1,500,000

2 Accumulated Profits (Losses) P120,000

3 Accumulated Profits (Losses) P200,000

4 Accumulated Profits (Losses) P500,000

5 Accumulated Profits (Losses) appropriated

ANSWER 1.) Date of Declaration

Accumulated Profits (Losses) P500,000

2.) Date of Shareholders Record

3.) Date of Payment

Cash Dividends Payable P500,000

10% Preference Shares, P150 par, 10,000

A. Non cumulative and non participating

ANSWER A. Non cumulative and non participating

Cash Dividend is distributed as follows:

B. Cumulative and non participating

Cash Dividend is distributed as follows