WEEK 8 (MARCH 08-13, 2021)

EXERCISES ON CORPORATE ORGANIZATION AND SHARE TRANSACTIONS

EX. 5.4 - FRAGRANCE CORPORATION

GIVEN:

FRAGRANCE CORPN HAS ENGAGED IN THE FOLLOWING SELECTED

TRANSACTIONS:

A- REACQUIRED FOR P24,000 2,000 OF ITS 20,000 ORDINARY SHARES.

THE P10 PAR ORDINARY SHARES WERE ORIGINALLY
ISSUED AT AN AVERAGE PRICE OF P15 PER SHARE.

B- REISSUED FOR CASH 500 OF THE REACQUIRED SHARES

AT P13 PER SHARE

C- REISSUED FOR CASH 1,000 OF THE REACQUIRED SHARES

AT P10 PER SHARE.

D- CANCELLED THE REMAINING TREASURY SHARES

REQUIRED:

JOURNALIZE THE FOREGOING TRANSACTIONS

LEAVE THE PROBLEM ABOVE, AS IS OR USE 'HIDE' COMMAND

START YOUR ANSWER ON ROWS BELOW.

ANSWER/ SOLUTION:

A - REACQUIRED FOR P24,000 2,000 OF ITS 20,000 ORDINARY SHARES.

THE P10 PAR ORDINARY SHARES WERE ORIGINALLY
ISSUED AT AN AVERAGE PRICE OF P15 PER SHARE.

JE:
DR CR
TREASURY STOCK (2,000 * P12) 24,000
CASH 24,000

REACQUISITION FOR P24,000 2,000 OF ITS 20,000 ORDINARY SHARES.

THE P10 PAR ORDINARY SHARES WERE ORIGINALLY
ISSUED AT AN AVERAGE PRICE OF P15 PER SHARE.

B - REISSUED FOR CASH 500 OF THE REACQUIRED SHARES

AT P13 PER SHARE

JE:

CASH (500 * P13) 6,500

 TREASURYSHARES (500 * P12) 6,000
SHARE PREMIUM - TREAS SHARES
(500 * [P13-P12]) 500
6,500 6,500

REISSUANCE FOR CASH 500 OF THE REACQUIRED SHARES

AT P13 PER SHARE

C - REISSUED FOR CASH 1,000 OF THE REACQUIRED SHARES

AT P10 PER SHARE.

CASH (1,000 * P10) 10,000

SHARE PREMIUM - TREASURY SHARES
(500 * P1) 500
RETAINED EARNINGS 1,500
TREASURY SHARES (1,000 * P12) 12,000
12,000 12,000

REISSUANCE FOR CASH 1,000 OF THE REACQUIRED SHARES

AT P10 PER SHARE.

D - CANCELLED THE REMAINING TREASURY SHARES

JE:

ORDINARY SHARES (500 * P15 PAR ) 7,500

SHARE PREM - ORD (500 * P15-P12) 1,500
TREASURY SHARES (500 * P12) 6,000
7,500 7,500

TO CANCEL THE REMAINING TREASURY SHARES

NOTE: 1,000 RE-ACQUIRED @ P12 ; LESS 500 REISSUED #P13;
LESS ANOTHER 1,000 REISSUED @P10 EQUALS
500 RE-ACQUIRED SHARES REMAINING W/CH WERE
CANCELLED

END EX.# 5.4 FRAGRANCE CORPN

ANALYS OF TREAS STOCK TRANS USING 'T' ACCT

TREASURY SHARES CASH

A 24,000 B 6,000 B 6,500 A 24,000
BAL. 0 C 12,000 C 10,000
D 6,000
24,000

SHARE PREM - TREAS SHARES RETAINED EARNINGS

C 500 B 500 C 1,500
 BAL 0

ORDINARY SHARES SHARE PREM - ORDINARY SHARES

D 7,500 D 1,500