Answers Part 5

Problem 1 - ABC
1
Feb. 12 Cash 100,000
Ordinary Shares (par) 100,000
July 10 Cash 630,000

Share Premium 130,000
Nov 5 Cash 1,050,000

2
Feb. 12 Cash 100,000
Ordinary Shares (SV) 10,000

Nov 5 Cash 1,050,000

3
Feb. 12 Cash 100,000
Ordinary Shares 100,000

Nov 5 Cash 1,050,000

Ordinary Shares 1,050,000
Problem 2 - DEF
Feb 10 Cash (75,000 x P86) 6,450,000

Ordinary Share (par) 6,375,000
Mar 27 Land 920,000

Building 1,087,500
Ordinary Shares (par) 1,827,500
May 23 Cash (28,000 x 86.50) 2,422,000

Ordinary Shares (par) 2,380,000
Problem 2
July 2 Cash (12,000 x 17) 204,000
1 Ordinary Shares (@stated value) 156,000
Share Premium - OS 48,000
July 17 Cash (800 x 112) 89,600

Preference Share (@par) 88,000
Share Premium - PS 1,600
2 Legal Capital Ordinary shares (stated value) 204,000

Preference Shares (par value) 88,000
Total 292,000
POV in Investors Ordinary shares (stated value) 204,000

Preference Shares (par value) 89,600
Total Investment 293,600
Problem 3
1 Cash (20 x 25,000) 500,000

Ordinary Shares (@par) 125,000
2 Cash 850,000
Ordinary Shares (@SV) 250,000
3 Cash (25,000 x 25) 625,000

Problem 4
Feb 1 Cash 125,000
Subscriptions Receivable 250,000
Subscribed Ordinary Shares (par)
Share Premium
15 Cash 180,000
Ordinary Shares (@par)
Share Premium
Mar 1 Cash 125,000

Subscription Receivable
19 Equipment 3,800
Ordinary Shares (@par)
Share Premium
Apr 1 Cash 125,000

Subcription Receivable
Subscribed Ordinary Shares 250,000

Ordinary Shares
250,000
125,000
100,000
80,000
125,000
2,000
1,800
125,000
250,000
Problem 5
Shares
Issued and
1 Jan 1 outstanding (P500,000/5) 100,000
March 31 Issued 100,000

Treasury Shares (purchase TS on March 28) (10,000)
Outstanding Shares 90,000
June 30 Issued 100,000

Treasury Shares (10,000 - 4,000) (6,000)
Sept 30 Issued 100,000

Treasury Shares (6,000 - 2,000) (4,000)
Entries
March 28 Treasury Stock (10,000 x 15) 150,000
2 Cash 150,000
April 10 Cash (4,000 x 14) 56,000

Retained Earnings 4,000
Treasury Stock (4,000 x 15) 60,000
July 5 Cash (2,000 x 16) 32,000

Share Premium - TS 2,000
Problem 6
Entries
Jan 4 Treasury Stock 168,000
Cash 168,000
(P168,000/24,000) = P7/TS
Jan 10 Cash (4,000 x 9) 36,000
Jan 29 Cash (14,000 x 6) 84,000

Jan 31 Cash (6,000 x 7) 42,000

Problem 7
1 Total Issue Price of Preference Shares

2 How many ordinary shares issued
3 How many ordinary shares are outstanding
4 What was the total issue price of ordinary shares
5 What is the total legal capital of the corporation
6 What is the total contributed capital
7 What is the total Stockholders' Equity

8 For how much per share was the Treasury Stock purchased?
9 What is the amount of the required preference dividends
oblem 7
(P75 par x 70,000 shares issued) P5,250,000

P500,000/P5 stated value 100,000 shares
100,000 shares issued less 10,000
Treasury Shares 90,000 shares
P500,000 stated value plus
P600,000 share premium P1,100,000 P11/share
P5,250,000 PS + P500,000 OS +
P600,000 Share Premium-OS P6,350,000
P5,250,000 PS + P500,000 OS +
P600,000 Share Premium-OS P6,350,000
P7,350,000 Share Capital and RE
Less P40,000 TS P7,310,000
P40,000 TS / 10,000 shares P4 per share
6% x P5,250,000 P315,000
Problem 8
Share Retained
Assets Liabilities Capital Earnings
1 0 + 0 - Sept. 1
2 - - 0 0
3 0 0 + -
4 0 0 0 0 15
5 - 0 0 0
6 + 0 + - Oct. 1
Problem 9
Cash Dividends Payable 750,000
No Entry
Cash Dividends Payable 750,000

Cash 750,000
Problem 10A
June 1 Retained Earnings 225,000

Shares Distributable (@par) 50,000
(55,000 - 5,000)*10% x P45 = 225,000
15 No Entry
July 1 Shares Distributable 50,000

Problem 10B
Nov. 1 Retained Earnings 900,000

50,000*45% x P40 = 900,000
Dec. 1 No Entry
Dec. 31 Shares Distributable 900,000

Problem 11
1 Retained Earnings 1,000,000

Shares Distributable (@par) 1,000,000
50,000*20% x P100 = 1,000,000
Shares Distributable (@par) 1,000,000

Ordinary Shares 1,000,000
2 Retained Earnings 750,000

50,000*10%*P150 = 750,000

Problem 12
1 June 7 Retained Earnings 960,000 2

80,000*10% x P120 = 960,000
June 28 Shares Distributable (@par) 400,000

Dec 5 Retained Earnings 880,000

Cash Dividend Payable 880,000
80,000 + 8,000(Dividends) = 88,000 shares issued and o/s

88,000 x P10 = P880,000
Dec 26 Cash Dividend Payable 880,000

Cash 880,000
Dec 31 Income Summary 2,380,000

Retained Earnings 2,380,000
2
Laguna Corporation
Statement of Retained Earnings
December 31, 2021
Retaind Earnings, January 1 2,850,000

Add: Profit 2,380,000
Total 5,230,000
Less:
Shares Distributable 960,000
Cash Dividends 880,000 1,840,000
Retained Earnings, End 3,390,000

Proble
1 Jan 8 Cash (P26 x 10,000) 260,000

Ordinary Shares (@par) 100,000
March 12 Cash (4,000 x 27) 108,000

Share Premium -TS 8,000
June 30 Retained Earnings (2,100xP30) 63,000

Shares Distributable (par) 21,000
(25,000-4,000+10,000+4,000)*6% x P30 = 63,000
July 10 Shares Distributable (par) 21,000

Oct 7 Treasury Stock 30,800

Cash 30,800
Dec. 18 Retained Earnings 72,000

Cash Dividend Payable 72,000
(35,000 + 2,100 - 1,100) x P2 = P72,000
Dec. 31 Income Summary 183,000

Problem 13
Shareholders' Equity
Share Capital
Ordinary Shares, P10 par, 100,000 shares authorized
37,100 issued, 36,000 outstanding shares 371,000
Share Premium - OS 527,000
Total Share Capital 918,000

Total Share Capital and Retained Earnings 1,164,000
Less: Treasury Stock, 1,100 shares @cost 30,800
Total Stockholders' Equity 1,133,200
a. P125,000/P25par 5,000 issued shares 1
P150,000/ 5,000 shares =
P30 issue price 2
3
b. P62,500/P25par 2,500 issued shares 4
c. P25,000/P25 par 1,000 issued shares 5
d. P37,500/P25 par 1,500 issued shares
7
ANSWERS
What is profit for the year? P30,000
How many ordinary shares are 10,000 issued and
outstanding? outstanding
What is the legal capital? P250,000
What is the total share capital?
P250,000 par + P75,000 share P325,000
premium =
P30,000 profit - P7,500 cash

What is the total retained earnings dividends = P22,500
balance at the end of the year?
What is the total shareholders'
equity? P347,500
(P325,000 + P22,500 = P347,500)
Ordinary Shares = P250,000
Share Premium = P75,000
Retained Earnings = P22,500
What is the book value per share of P347,000/10,000 shares =
the ordinary shares at the end of the
year? P34.75/share
SHE / Ordinary shares outstanding
2,500 = P347,500)
Stockholders' Equity
Share Capital
Preference Shares, P200 par, 3,000 shares
authorized, issued and outstanding
Share Premium - Preference Shares
Ordinary Shares, No-par, P20 stated value;
300,000 shares, issued and outstanding
Donated Capital
Total Contributed Capital
Retained Earnings:
Unappropriated
Appropriation for Pending Litigation
Total Stockholders' Equity

ers' Equity
600,000
10,000 610,000
6,000,000
400,000
7,010,000
500,000
600,000 1,100,000
8,110,000

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Answers Part 5

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Problem 1 - ABC

July 10 Cash 630,000

Nov 5 Cash 1,050,000

July 10 Cash 630,000

Nov 5 Cash 1,050,000

July 10 Cash 630,000

Nov 5 Cash 1,050,000

Feb 10 Cash (75,000 x P86) 6,450,000

Mar 27 Land 920,000

May 23 Cash (28,000 x 86.50) 2,422,000

July 17 Cash (800 x 112) 89,600

2 Legal Capital Ordinary shares (stated value) 204,000

POV in Investors Ordinary shares (stated value) 204,000

1 Cash (20 x 25,000) 500,000

3 Cash (25,000 x 25) 625,000

Mar 1 Cash 125,000

Apr 1 Cash 125,000

Subscribed Ordinary Shares 250,000

March 31 Issued 100,000

June 30 Issued 100,000

Sept 30 Issued 100,000

April 10 Cash (4,000 x 14) 56,000

July 5 Cash (2,000 x 16) 32,000

Jan 10 Cash (4,000 x 9) 36,000

Treasury Stock (4,000 x 7) 28,000

Share Premium - TS 8,000

Jan 29 Cash (14,000 x 6) 84,000

Jan 31 Cash (6,000 x 7) 42,000

1 Total Issue Price of Preference Shares

3 How many ordinary shares are outstanding

4 What was the total issue price of ordinary shares

5 What is the total legal capital of the corporation

6 What is the total contributed capital

7 What is the total Stockholders' Equity

(P75 par x 70,000 shares issued) P5,250,000

Cash Dividends Payable 750,000

June 1 Retained Earnings 225,000

(55,000 - 5,000)*10% x P45 = 225,000

July 1 Shares Distributable 50,000

Nov. 1 Retained Earnings 900,000

50,000*45% x P40 = 900,000

Dec. 31 Shares Distributable 900,000

1 Retained Earnings 1,000,000

50,000*20% x P100 = 1,000,000

Shares Distributable (@par) 1,000,000

2 Retained Earnings 750,000

Shares Distributable (@par) 500,000

1 June 7 Retained Earnings 960,000 2

80,000*10% x P120 = 960,000

June 28 Shares Distributable (@par) 400,000

Dec 5 Retained Earnings 880,000

80,000 + 8,000(Dividends) = 88,000 shares issued and o/s

Dec 26 Cash Dividend Payable 880,000

Dec 31 Income Summary 2,380,000

Retaind Earnings, January 1 2,850,000

Retained Earnings, End 3,390,000

1 Jan 8 Cash (P26 x 10,000) 260,000

March 12 Cash (4,000 x 27) 108,000

June 30 Retained Earnings (2,100xP30) 63,000

(25,000-4,000+10,000+4,000)*6% x P30 = 63,000

July 10 Shares Distributable (par) 21,000

Oct 7 Treasury Stock 30,800

Dec. 18 Retained Earnings 72,000