IAME:

SCORE:
,ECTION:
PROFESSOR:

?roblem #20
Shareholders' Equity Transactions and St atement . .
of Fmanc,al Position Presentation
The shareholders' equity of M · Gangoso Corporation
at Jan. 1, 2015, appears below:
8% Preference Shares , P250 par, 15
,000 s hares ₱ 1,450,000
authorized, 5, 8 0 0 shares issued and outstanding
Share Premium-Preference
870,000
Ordinary Shares, ₱ 100 par, 200,000 shares authorized,
40, 0 0 0 shares issued and outstanding f
4,000,000
Share Premium-Ordinary 2,400,000
Retained Earnings 2,700,000

During 2015, the following transactions occurred:

Jan. 10 Issued 16,000 ordinary shares for ₱ 180 cash per share.
23 Purchased 6,000 ordinary shares for the treasury at ₱ 200 per share.
Mar. 2 Shareholders donated 4,000 ordinary shares to the corporation.
14 Sold one-half of the treasury shares acquired last Jan. 23for ₱ 210 per
share.
14 Sold the donated shares at ₱ 210 per share.
July 15 Issued 3,200 preference shares to acquire special equipment with a fair
market value of ₱ l,440,000.
Sep.15 Received subscriptions to 18,000 ordinary shares at ₱ 250 per share.
Oct. 15 Received cash payment from each subscriber for 40% of the ordinary
shares subscription price.
Nov. 15 Received the balance due on the Sept. 15 shares subscriptions in cash
and issued the stock certificates.
Dec. 31 Closed profit of ₱ 522,000 from the Income Summary account toRetained
Earnings.

Required:
1. Set up T-accounts for the shareholders' equity accounts at the beginning of the year
and enter January 1 balances.
2_ Prepare journal entries to record the foregoing tran actions and post to T-acc unt .
Determine the ending balances for the shareholders' equity ac aunts.
3. Prepare the Dec. 31, 2015 shareholders' equity ection of the tat m nt financial
\ position.
I
 NAME: SCORE:
I I
SECTION: PROFESSOR:

Problem #25
Recording Effects of Shareholders' Equity Transactions in Ledger Accounts
and Preparing Shareholders' Equity Section of Statement of Financial Position

The following events and transactions relate to the shareholders' equity accounts of the
Galvez Corporation for 2014:
Jan. 3 The articles of incorporation was received, authorizing Galvez Corporation to
issue 100,000 shares of ₱5 par ordinary shares and 30,000 shares of ₱50 par
preference shares.
5 8,000 ordinary shares were issued to the incorporators of the business for
₱100,000.
9 1,000 preference shares were sold for ₱56 per share.
15 Subscriptions to 12,000 ordinary shares were sold. The subscription price was
₱15 per share; one-third of the total was received as a down payment.
31 200 preference shares were issued to the lawyers inpayment for legal services
rendered indrawing upthe articles of incorporation. A value of ₱ 56 per share was
deemed appropriate.
Feb. 1 One-third of the subscription price of the subscribed shares was received.
15 Galvez Corporation purchased 2,000 ordinary shares from one of the
incorporators for ₱ 14 per share.
Mar. 1 The final balance due was received on the subscribed shares. The shares
were issued.
20 Galvez Corporation sold 500 shares of treasury stock for ₱ 1 7.50 per share.
May 30 Galvez received a piece of machinery asa donation from Cabrera Equipment, Inc.
The machinery has a market value of ₱ 75,000.
Sep. 15 Galvez sold, for ₱13.50 per share, 500 shares of the treasury stock purchased on
Feb. 15.

The balance of the retained earnings account after all 2014 entries is₱36,400.

Required:
1. Prepare T-account entries for each of these events and transactions. Do not make
entries in journal form, but instead set up the T-accounts you need and post your
entries directly to the T-accounts.
2. Prepare the shareholders' equity section of Galvez Corporation's statement of
financial position.