Marketing/Strategy

Authorized Shares
10,000

Issued Shares Unissued Shares

7,000 3,000

Outstanding Treasury Subscribed Unscribed

7,000 0 2,000 1,000

Financial Presentation:
SHE as of Apr 3
Share Capital (Issued 7,000 shares P10 Par) 70,000
Share Premium 14,000
Unappropriated Retained Earnings (50k-7200) 42,800
Appropriated RE for treasury shares 7,200
Treasury Shares (12 cost) -7,200
126,800

REACQUARED:
Shares 600
OIP 12
COST TS 12

Apr-03 Treasury Shares (600*12) 7,200 600 shares X 12

Cash 7,200
Acquired 600 own shares at 12.

Unappropriated Retained earnings 7,200

Appropriated for treasury shares 7,200
Reserved for treasury shares

REISSUE: 200 shares at 15

RP 15 Higher - CR - SP - TS
COST TS 12
Cr. SP-TS 3

Jun-30 Cash (200*15) 3,000

Treasury shares (200*12) 2,400 (200 X12)
Share Premium - Treasury shares 600 (200 X 3)
Reissued 200 shares at 15.

Appropriated for treasury shares 2,400

 Unappropriated Retained Earnings 2,400
Reversal of appropriations

REISSUE: 300 shares at 8

Shares 300
RP 8
COST TS 12 Higher - Dr - SP - TS
Dr. SP - TS 4 (300*4) = 1,200

Jul-02 Cash(300*8) 2,400

Share Premium - Treasury share 600
Retained Earnings (1600-600) 600
Treasury Shares(300*12) 3,600 (300 X 12)
Reissued 300 shares at P8.

RETIREMENT:
Retire shares 100
OIP 12
COST 12
SP - TS 0

OIP 12
PAR 10 Higher - DR to SP Orig
Dr. SP - Orig 2

Dec-01 Share Capital (100*10) 1,000 (100sh X 10)

Share Premium 200 (100sh X 2)
Treasury shares (100*12) 1,200 (100 X 12)
Retired 100 shares.

REACQUIRED:
Shares 600
OIP 12
COST TS 12

Apr-03 Treasury Shares (600*12) 7,200

Cash 7,200 1
Acquired 600 own shares at 12.

REISSUE:
Shares 200
RP 15 Higher - CR - SP - TS
COST TS 12
CR. SP - TS 3

Jun-30 Cash (200*15) 3,000

Treasury shares (200*12) 2,400
Share Premium - Treasury shares 600
Reissued 200 shares at 15.

REACQUIRED: 500 at 9 cost

Jul-01 Treasury shares (500*9) 4,500 2

Cash 4,500
Acquired 500 shares at P9

REISSUED: 500 at 10 RP

Jul-02 Cash (500*10) 5,000

Share Premium - Treasury share 600
Retained Earnings 100
Treasury Shares 5,700
Reissued 500 shares at P10.
 DIVIDENDS- distribution of profits in the form of cash/property/stocks

Profit 140,000 140,000

Outstanding shares 7,000 6,000
Profit share/stock 20 23

Share Capital 70000

Share premium 14000
Total 84000
Dividend: Issued shares 7000
Original Issue Price 12
Cost TS 12

600 shares X 12

15> 12 = 3
Reissue price/Selling price > Cost = Share Premium - TS
Reissue price/Selling price < Cost = Share Premium - TS (if any)
Retained Earnings
 8< 12= 4

Retirement 10-12 = 2

Orig Issue Price > Cost Par 10

Orig Issue Price <Cost OIP 12
12 = 12

600 12
 600-200
-200 Remaining TS 400 X 12 4,800

FIFO 500-400 +
500 9 Remaining TS 100 x 9 900
(400+500)= 900 TS 5,700
500-400=100
STOCK ISSUANCE:
ACCOUNTING FOR SHARE CAPITAL - ISSUE STOCK CERTIFICATES AS A PROOF OF OWNERSHIP TO A STOCK CORP.
INVESTMENTS OF SHAREHOLDERS/STOCKHOLDERS

Cash 10,000 at face amount

Equipment 20,000 at FMV, Carrying value, Historical cost
SP, Capital 30,000
Investment

Cash 10,000
Equipment 20,000
Share Capital/Ordinary Share/Pr 30,000 Lump-sum or installment
Investment/Issuance of share.
LUMPSUM:
Given:
Issue Price 12.5
Shares 800
Par 10

Lump Sum issuance - Par 10 Issue Price > Par Value = Share Premium
10,000 > 8,000 = 2,000
Cash (800*12.5) 10,000 12.5 > 10 = 2.5 x 800 = 2,000
Share capital (800*10) 8,000 (800 shares X 10)
Share Premium 2,000
Issuance of 800 shares

DELINQUENT STOCKS

Given:
Issue Price 12.5
Shares 800
Par 10
Defauted shares 300
Delinquent stocks 300 shares defaulted

Subscription Receivable(800*12.5) 10,000

Subscribed Share Capital (800*10) 8,000
Share Premium 2,000
Subscription of 800 shares

Cash (800*12.5*50%) 5,000 800 shares X 12.5 X50%

Subcription Receivable 5,000
Received 50% downpayment.

Due from highest bidder 1,875 Subscription Price/share

Subscription Receivable 1875 Delinquent share
Delinquent 300 shares Total subscription (delinquent)
Downpayment received
Cash 1,875 Uncollected
Due from highest bidder 1,875
Collection from HD.

Subscribed Share Capital 3,000

Share Capital (300*10 par) 3,000
Issuance of 300 shares

Cash 3,125 500 X 12.5 X 50% = 3,125

Subscription Receivable 3,125
Full collection of the 500 subscription

Subcribed Share Capital 5,000

Share Capital 5,000
Issuance of 500 shares
TO A STOCK CORP.

ying value, Historical cost

INSTALLMENT:
Given:
Issue Price 12.5
Shares 800
Par 10

= Share Premium Installment issuance

Totals
2.5 x 800 = 2,000 Per share Subscription Receivable(800*12.5) 10,000
Subscribed Share Capital (800*10) 8,000
Share Premium 2,000
Subscription of 800 shares

Cash (800*12.5*50%) 5,000

Subcription Receivable 5,000
Received 50% downpayment.

Cash (800*12.5*50%) 5,000

Subscription Receivable 5,000
Full collection

Subscribed Share Capital 8,000

Share capital (800*10) 8,000
Issuance of 800 stock certificates.

HD is the lowest shares bidder

 A - 125 shares B- 100 shares
Who is the HD??? B A
Payment 1875 1875
Shares bidded 100 125
Bid per share 18.75 15

Kanino mapupunta yung 300 delinquent shares

B 100
Orig Subscriber 200

12.5
300
3,750
-1,875
1,875
 TREASURY SHARES:

1. On January 1, 20x1, the statement of financial position of ABC Co. shows the following information:

Share capital (authorized 20,000 shares with par value of ₱100)

Share premium

Retained earnings

Total shareholders’ equity

Requirements:

1. Provide the entries for the following:

b. On July 1, 20x1, ABC reacquires 1,000 shares at ₱90.

c. On September 1, 20x1, reissues the 800 treasury shares at ₱140.

d. On October 1, 20x1, reacquires the 1,000 treasury shares at ₱110.

e. On November 15, 20x1, reissues the 500 treasury shares at ₱60.

f. On December 31, 20x1, retired 500 treasury shares.

2. Prepare the stockholders’ equity at December 31, 20x1.

 1. Provide the entries for the following:

1,600,000

320,000 B. REACQUIRED:
1,080,000 20x1 Treasury Shares 90,000
3,000,000 Jul-01 Cash
Reacquired 1k shares at 90.

Retained Earnings - Unappropriated 90,000

Retained Earnings - Appropriated
Reserved for treasury shares

C. REISSUES
Shares 800
Reissue Price 140 Higher - Cr. - SP - TS
TS Cost 90
SP - TS 50

20x1 Cash (800*140) 112,000

Sep-01 Treasury Shares (800*90)
Share Premium - TS (800*50)
Reissued 800 shares at 140.

Retained Earnings - Appropriated 72,000

Retained Earnings - Unappropriated
Reversal of appropriations

D. REACQUIRES:

20x1 Treasury Shares (1k*110) 110,000

Oct-01 Cash
Reacquired 1k shares at 110.

Retained Earnings - Unappropriated 110,000

Retained Earnings - Appropriated
Reserved for treasury shares

E. REISSUES

1st Reacquired 1,000 2nd Reacquired

 1st Reissue 800 2nd Reissue
Remaining shares 200 Remaining Shares
Mul:Reissue TS COST 90 Less: RS
1st Treasury Shares 18,000 Remaining Shares
Multiply: Reacquired TS COST
2nd Treasury shares

1st Treasury Shares 18,000

2nd Treasury shares 33,000
Treasury Shares 51,000

Shares 500
Reissue Price 60
TS Cost 110 Higher - Dr. - SP - TS

20x1 Cash (500*60) 30,000

Nov-15 Share Premium - TS 21,000
Treasury Shares
Reissued 500 shares at 60.

Retained Earnings - Appropriated 51,000

Retained Earnings - Unappropriated
Reversal of appropriations

F. RETIREMENT:
Shares retired 500

Share capital 1,600,000

Divided by: Par Value 100
Issued Shares 16,000

Share Capital 1,600,000

Share Premium 320,000
Total 1,920,000
Divided by: Issued Shares 16,000
Original Issue Price 120

OIP 120 Higher - Cr. - SP - TS

TS COST 110
SP - TS 10

OIP 120 Higher - Dr. - SP - Orig

PAR 100
SP - Orig 20
 20x1 Share Capital (500*100) 50,000
Dec-31 Share Premium - (500*20) 10,000
Treasury Shares (500*110)
Share premium - TS (500*10)
Retired 500 shares.
 90,000

90,000

72,000
40,000

72,000

110,000

110,000

1,000
 500
500
200
300
Reacquired TS COST 110
33,000

51,000

51,000
55,000
5,000
 Retained Earnings:

1 Income Summary 1,350,000

Retained earnings 1,350,000
Profit at year end

2 Treasury Shares (10k*10) 100,000

Cash 100,000
Reacquired 10k TS shares at P10.

RE - unappropriated 100,000
RE - Appropriated 100,000
Reserved for Treasury shares

3 RE - unappropriated 800,000
RE - Appropriated 800,000
Reserved for contingency fund

4 RE - unappropriated 1,000,000
RE - appropriated 1,000,000
Reserved for retirement of bonds payable

5 RE - appropriated 1,200,000
RE - unappropriated 1,200,000
To removed the restriction on RE