Problem #7

1. Total authorized ordinary shares: 20,000 shs. x P15 =P300,000

2. Total unissued ordinary shares: 2,000 shs. x P15 = P30,000

3. Total issued ordinary shares: 18,000 shs.x P15 = P270,000

4. Ordinary shares subscribed: P27,000

5. Total Shareholders' Equity:

Ordinary Shares P270,000
Share Premium 95,000
Subscribed Ordinary Shares P27,000
Less: Subscriptions Receivable 17,000 10,000
Retained Earnings 200,000
Total P575,000
Less: Treasury Stock Total Shareholders' Equity 25,000
P550,000

6. Number of shares issued: 18,000 shares

7. Number of shares subscribed: P27,000/P15 = 1,800 shares

8. Number of treasury shares: 1,000 shares

9. Number of outstanding shares: 18,000 - 1,000 =17,000 shares

Problem #8

Assets Liabilities Share Retained

Capital Earnings

Declaration of cash dividends – + 0 0

Payment of cash dividends – – 0 0

Declaration of share dividends 0 0 + –

Issuance of share dividends 0 0 0 0

Cash purchase of treasury stock – 0 – 0

Sale of treasury stock below cost + 0 + –

Problem #9

Jan 2. Retained Earning 35,000

Cash Dividends Payable 35,000

Jan. 22 No Entry

Feb. 1 Cash Dividends Payable 35,000

Cash 35,000