Professional Documents
Culture Documents
Sir Win - Exercises
Sir Win - Exercises
May 19 Amity exchanged 200 shares of stock for a furniture having a fair market Nov. 15 Cash 90,000
value of 3,800. Subscription receivable - ordinary 90,000
Jun 3 The final one-third of the subscription price was received and the shares Dec. 31 Income summary 250,000
Retained earniings 250,000
issued.
Jul 11 Reacquired 2,500 share at P12 of Amity to be held in treasury
Aug 8 Amity sold subscriptions for 25,000 shares of stock. The shares have a
subscription price of P18 per share. No down payment was received. PAR VALUE AND NO PAR VALUE SHARES
Sept 9 Reissued 1,000 share of treasury at cost. Katrina Corporation’s articles authorized the issuance on 100,000 ordinary
Oct 5 Amity sold 10,000 shares for 180,000. shares. Katrina sold the following ordinary shares during 2020.
Nov 15 Collected 20% of the total subscription price on August 8.
Dec 31 Income at year end amounted to 250,000. Feb. 12 Sold 1,000 shares for P100,000.
Mar 5 Sold 5,000 shares for P630,000.
Prepare journal entries to record the transactions. Aug. 6 Sold 7,500 shares for P1,050,000.
Jan. 1 The corporation was authorized to issue 500,000
shares of P10.00 par ordinary share
Prepare journal entries to record each issuance and compute for the legal
Feb. 1 Subscription receivable - ordinary 375,000
Subscribed ordinary share 250,000 capital, assuming that:
Share premium - ordinary 125,000 1. The ordinary shares has a P100 par value.
Cash 125,000 2. The ordinary shares has a P10 stated value.
Subscription receivable 125,000
3. The ordinary shares has no-par or stated value.
Mar. 9 Organization expense 15,000
Ordinary share 10,000
Share premium - ordinary 5,000 1.PAR VALUE
Feb. 12 Cash 100,000
Apr. 13 Cash 125,000
Ordinary share capital 100,000
Subscription receivable - ordinary 125,000
May 19 furnitures 3,800 Mar. 5 Cash 630,000
Ordinary share capital 500,000
Ordinary shares 2,000
Share premium - 130,000
Share premium - ordinary 1,000
ordinary
Jun. 3 Cash 125,000
Aug. 6 Cash 1,050,000
Subscription receivable - ordinary 125,000
Ordinary share capital 750,000
Share premium - 300,000 legal services pertaining to incorporation costing 50,000.
ordinary
Oct. 7 Sold 5,000 shares of preference share at P110 for cash.
legal capital
(100,000+500,000+750,000)
12 Issued 30,000 shares of ordinary shares in exchange for a building
= 1,350,000 with a fair market value of P1,850,000.
ORDINARY AND PREFERENCE SHARES Ordinary Shares, P10 par, 200,000 shares authorized,
Allodra Corporation was organized on September 24, 2020. The corporation 150,000 shares issued and outstanding 1,500,000
was authorized to issue 10,000 shares of 10% preference shares, P100 par Share Premium - ordinary 300,000
value, and 100,000 shares of ordinary shares, P40 par value. Record in a Retained Earnings 2,500,000
general journal the following transactions completed during the firm’s first Total Shareholders’ Equity 4,300,000
year of operations:
Prepared the journal entries to record the following transactions that took
Sept. 24 Sold 40,000 shares of ordinary shares at par for cash. place during January 2022:
27 Issued 1,000 shares of ordinary share to lawyer in exchange for
Feb. 8 Purchased 50,000 shares of its own April for P750,000. RETAINED EARNINGS
17 Sold 10,000 shares of the treasury stock for 20.00/share. Raisa Company reported the following shareholder’s equity on January 1,
Mar. 29 Sold 15,000 shares of the treasury stock for 8.00/share. 2021:
Apr. 3 Sold 10,000 shares of the treasury stock for 18.00/share. Ordinary Shares, P5 par, 600,000 shares authorized,
200,000 shares issued and outstanding 1,000,000
22 Retire the remaining treasury stock.
Share Premium - ordinary 1,500,000
Retained Earnings appropriated for plant expansion 1,200,000
Feb. 8 Treasury share (50,000xP15) 750,000 Retained Earnings 2,800,000
Cash 750,000 Total Shareholders’ Equity 6,500,000
17 Cash (10,000xP20) 200,000
Treasury share (10,000xP15) 150,000 Prepared the journal entries to record the following transactions related to
Share premium - treasury 50,000 Retained Earnings
Mar 29 Cash (15,000xP8) 120,000 1. Reported a net profit for the year amounting 1,350,000.
Share premium - treasury 50,000 2. Raisa reacquired 10,000 shares at P10.00 per share to be held as treasury. No other
Retained earnings 55,000 transactions occurred during the year pertaining to treasury share.
Traeasury share (15,000xP15) 225,000 3. Raisa appropriated 800,000 of retained earnings that will serve as contingency fund.
4. Also,1,000,000 of cash was restricted for the retirement of bonds payable due 2023.
Apr 3 Cash (10,000xP18) 180,000
5. The plant expansion was completed during the year at a cost of 1,500,000.
Treasury share (10,000xP15) 150,000
Share premium - treasury 30,000
1.) Income summary 1,350,000
22 Ordinary share capital (15,000xP10) 150,000 Retained earnings 1,350,000
Share premium - ordinary (15,000xP2) 30,000
Share premium - treasury 30,000 2.) Retained earnings 100,000
Retained earnings 15,000 Retained earnings appropriated for 100,000
Treasury share (10,000xP15) 225,000 treasury shares
SHARE SPLIT
Prepare journal entries to record the transactions related to the donations.
Sept. 7 Land 7,500,000
On January 1, 2021, the records of Wendell Corporation showed the
Donation income 7,500,000 following balances:
Nov 17 Donation of 15,000 shares was received Ordinary Share, P5 par, 200,000 share authorized
25 Equipment 750,000 20,000 share issued, 15,000 shares outstanding 100,000
Donated capital 750,000 Share Premium 20,000
Dec 15 Cash 1,000,000 Retained Earnings 150,000
Donated capital 1,000,000 Treasury Share, 5,000 shares at P12 cost (60,000)
Total Shareholder’s Equity 210,000
Date of declaration
On March 11, 2021, the board of directors declared a 2-for-1 share split 2021
Dec 15 Retained earnings 3,000,000
when the market price of the share was P25.
Property dividends payable 3,000,000
1. Prepare the entries to record the share split.
2. Assuming that the entity declared a 1-for-2 reversed split, what will be the End of reporting period
entries to record the split down. Dec 31 Retained earnings 200,000
Property dividends payable 200,000
1.) Memo; Issued 4,000 new shares with a par value of P2.50, as a result of 2-for-1 share split of
Date of payment
20,000 old shares with par value of P5.00
2022
Jan 15 Retained earnings 300,000
2.) Memo; Issued 10,000 new shares with a par value of P10.00, as a result of 2-for-1 share split
Property dividends payable 300,000
of 20,000 old shares with par value of P5.00
15 Property dividends payable 3,500,000
CASH DIVIDENDS Equipment 2,500,000
Joana Corporation’s board of directors declared 1,200,000 cash dividends Gain on distribution of property dividends 1,000,000
on August 14, 2021, payable on October 9, to shareholders of record on
September 24. Assumption #2
On December 15, 2021, MEG Corporation declared a property dividend of
Required: Prepare all the appropriate entries needed on equipment payable on January 15, 2022.
1. Date of Declaration
2. Date of Record The carrying amount of the equipment is 2,500,000 and the fair value is
3. Date of Payment
2,000,000 on December 15, 2021.
Aug 14 Retained earnings 1,200,000
Cash dividends payable
Sept 24 No entry However, the fair value of the equipment is 1,800,000 on December 31,
Oct 9 Cash dividends payable 1,200,000
2021 and 1,500,000 on January 15, 2022.
Cash 1,200,000
Prepare all entries related to property dividends transaction.
PROPERTY DIVIDENDS Date of declaration
2021
Assumption #1
Dec 15 Retained earnings 2,00,000
On December 15, 2021, MEG Corporation declared a property dividend of Property dividends payable 2,000,000
equipment payable on January 15, 2022.
End of reporting period
Dec 31 Property dividends payable 200,000
The carrying amount of the equipment is 2,500,000 and the fair value is Retained earnings 200,000
However, the fair value of the equipment is 3,200,000 on December 31, Date of payment
2022
2021 and 3,500,000 on January 15, 2022.
Jan 15 Property dividends payable 300,000
Retained earnings 300,000
Prepare all entries related to property dividends transaction.
Property dividends payable 1,500,000 Ordinary Shares, P100 par, authorized 10,000 shares,
Loss on distribution of property 300,000 3,000 shares issued and Outstanding 300,000
dividends Share Premium – ordinary 100,000
Equipment 1,800,000 Share Premium – preference 150,000
Retained Earnings 700,000
STOCK DIVIDENDS The board failed to declare dividends for the past two years. The current
Assume the following data: year’s results of operations gave the board reasons to declare cash
Ordinary Shares, P100 par value, dividends of 200,000.
100,000 shares issued 10,000,000
Required: Compute for dividends per share for preference share and
Share Premium 1,200,000
Retained Earnings 3,000,000 ordinary share assuming that preference share is:
Total Shareholder’s Equity 14,200,000 1. Non-Cumulative and Non-Participating
For each of the following assumptions, prepare entries on the date of Preference Ordinary Total
declaration and date of payment: Outstanding share capital 200,000 300,000 500,000
1. A 20% share dividends is declared on ordinary shares. Current preference dividends;
2. A 10% share dividends is declared on ordinary shares. [200,000 x 12%] 24,000 24,000
Remainder to ordinary;
The fair market value of the shares are as follows: [200,000 - 24,000] 176,000 176,000
Declaration Date Php 150.00 Total 24,000 176,000 200,000
Distribution Date Php 185.00 Dividends per share P12 P58.67
1.) Large stock dividends ---> par value
Date of declaration
Retained earnings 200,000 2. Cumulative and Non-Participating
Stock dividends payable 200,000 Preference Ordinary Total
(100,000 shares x 20% x P100) Outstanding share capital 200,000 300,000 500,000
Preference dividends in arrears;
Date of payment [200,000 x 12% x 2] 48,000 48,000
Stock dividends payable 200,000 Current preference dividends;
Ordinary share capital 200,000
[200,000 x 12%] 24,000 24,000
2.) Small stock dividends ---> fair market value @ declaration date Remainder to ordinary
Date of declaration [200,000 - 48,000 - 24,000] 128,000 128,000
Retained earnings (100,000 x 10% x P150) 150,000 Total 72,000 128,000 200,000
Stock dividends payable (100,000 x 10% x P100) 100,000 Dividends per share P36 P42.67
Share premium - ordinary 50,000