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The Good Health SPA and Resot, Inc. had its articles of incorporation approved by the
SEC on September 1. It authorized the corporation to issue 500,000 shares of P52 par
value. The company complete stock transactions:
October 1 - Five incorporators subscribed to 175,000 shares at par as follows:
November 5- The lawyer billed the corporation P150,000 for assisting in the
incorporation process and was given the corresponding shares
November 10- Sold 10,000 shares to various shareholders at 120% of its par value
December 10- The incorporators paid another 25% of their subscription balance
December 20- Accepted subscription from Rubio, Perez, Santos, Sammy and Ong who
subscribed to 24,000 shares each at P55 per share. Each subscriber gave a 25% down
payment.a
December 26- Issued to A Zobel 50,000 shares in exchange for land at Redwoods but
with market value of P2,850,000
December 28- Three of the incorporators, Singson, Espiritu and Lim, oaid the balance
of their subscriptions and were issued the corresponding stock certificates.
ANSWERS
The Good Health SPA and Resot, Inc. had its articles of incorporation approved by the
SEC on September 1. It authorized the corporation to issue 500,000 shares of P52 par
value. The company complete stock transactions:
October 1 - Five incorporators subscribed to 175,000 shares at par as follows:
ENTRY:
Cash 2,150,000
Subscription **6,950,000
Receivable
Subscribed Share *9,100,000
Capital
*175,000 x 52 = 9,100,000
** 9,100,000- 2,150,000= 6,950,000
November 5- The lawyer billed the corporation P150, 000 for assisting in the
incorporation process and was given the corresponding shares
BONUS: This should have been 150,020 so that there will be 2885 shares issued.
Organization 150,020
Expenses
Share Capital 150,020
November 10- Sold 10,000 shares to various shareholders at 120% of its par value
Cash *624,000
Share Capital **520,000
Share Premium ***104,000
*10,000 x 52 x 120%= 624,000
** 10,000 x 52 = 520,000
*** 10,000 x 52 x 20% = 104,000
December 10- The incorporators paid another 25% of their subscription balance
Cash 1,737,500
Subscription Receivable 1,737,500
* 6,950,000 x 25% = 1,737,500
December 20- Accepted subscription from Rubio, Perez, Santos, Sammy and Ong who
subscribed to 24,000 shares each at P55 per share. Each subscriber gave a 25% down
payment.
Cash ***1,650,000
Subscription ****4,950,000
Receivable
Subscribed Share *6,240,000
Capital
Share Premium **360,000
* 24,000 x 5 x 52 = 6,240,000
** 24,000 x 5 x 3 = 360,000
*** 24, 000 x 5 x 55 x 25% = 1,650,000
NOTE: We multiply it by 5 because there are 5 shareholders who subscribed 24,000
shares each
**** 6,600,000-1,650,000= 4,950,000
December 26- Issued to A Zobel 50,000 shares in exchange for land at Redwoods but
with market value of P2,850,000
Land 2,850,000
Share Capital 2,600,000
Share Premium 250,000
December 28- Three of the incorporators, Singson, Espiritu and Lim, paid the balance
of their subscriptions and were issued the corresponding stock certificates.
ENTRY:
Cash 3,120,000
Subscription receivable 3,120,000