WEEK 8 (MARCH 08-13, 2021)

EXERCISES ON CORPORATE ORGANIZATION AND SHARE TRANSACTIONS

#5.1 MNO CORPN

GIVEN:

MNO CORPORATION ISSUED FOR CASH 2,000 ORDINARY SHARES AT P13 PER
SHARE. PREPARE THE JOURNAL ENTRY TO RECORD THE ISSUANCE ASSUMING
THE ORDINARY SHARE HAS:

A. - A PAR VALUE OF P10 PER SHARE.

B. - NO PAR BUT WITH A STATED ALUE OF P8 PER SHARE.
C. - NO PAR AND WITHOUT A STATED VALUE.

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

START YOUR ANSWER ON ROWS BELOW.

ANSWER/ SOLUTION:

A. - A PAR VALUE OF P10 PER SHARE.

B. - NO PAR BUT WITH A STATED ALUE OF P8 PER SHARE.

C. - NO PAR AND WITHOUT A STATED VALUE.

END. EX. #5.1
WEEK 8 (MARCH 08-13, 2021)
EXERCISES ON CORPORATE ORGANIZATION AND SHARE TRANSACTIONS

#5.2 SUNRISE CORPN

GIVEN:

SUNRISE CORPORATION, A FOOD CO., WAS ESTABLISHED ON JANUARY 2, 2018.

IT IS AUTHORIZED TO ISSUE 100,000 SHARES OF 6%, P50 PAR VALUE
PREFERENCE SHARE, AND A 600,000 SHARES OF NO PAR VALUE ORDINARY SHARES
WITH A STATED VALUE OF P5 PER SHARE. IT MADE THE FOLLOWING SHARE
TRANSACTIONS DURING THE YEAR:

FEB 12 ISSUED 120,000 ORDINAY SHARES FOR CASH AT P6 PER SHARE

MAR 02 ISSUED 30,000 PREFERENCE SHARE AT PAR FOR CASH
MAR 24 ISSUED 100,000 ORDINARY SHARES FOR A PIECE OF LAND AS FUTURE
BUILDING SITE. THE ASKING PRICE FOR THE LAND
WAS P700,000. THE FAIR VALUE WAS P600,000
APR 18 ISSUED 200,000 ODINARY SHARES FOR CASH AT P7 PER SHARE
NOV 15 ISSUED 10,000 PREFERENCE SHARES FOR CASH AT P54 PER SHARE

REQIRED:
A. - JOURNALIZE THE FOREGOING TRANSACTIONS.
B. - PREPARE THE SHARE CAPITAL SECTION OF THE STOCKHOLDERS'
EQUITY SECTION AS OF DEC 31. 2018

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

START YOUR ANSWER ON ROWS BELOW.

ANSWER/ SOLUTION:
A. - JOURNALIZE THE FOREGOING TRANSACTIONS.

B. - PREPARE THE SHARE CAPITAL SECTION OF THE STOCKHOLDERS'

EQUITY SECTION AS OF DEC 31. 2018
WEEK 8 (MARCH 08-13, 2021)
EXERCISES ON CORPORATE ORGANIZATION AND SHARE TRANSACTIONS

#5.3 GHI CORPN

GIVEN:

GHI CORPORATION, A DISTRIBUTOR OF VARIOUS BEAUTY PRODUCTS, WAS

AUTHORIZED TO ISSUE 10,000 SHARES 6% P100 PAR PREFERENCE SHARES
AND 40,000 P50 PAR ORDINARY SHARES. DURING ITS FIRST YEAR OF
OPERATIONS, IT ENGAGED IN THE FOLLOWING SELECTED TRANSACTIONS:

JAN 05 ISSUED 10,000 ORDINARY SHARES AT PAR FOR CASH

JAN 15 ISSUED 2,500 PREFERENCE SHARES AT PAR FOR CASH

FEB 10 PAID P6,000 CASH FOR COSTS INCURRED IN FORMING AND

ORGANIZING A CORPORATION

FEB 20 RECEIVED SUBSCRIPTION TO 20,000 ORDINARY SHARES

AT P60 PER SHARE TOGETHER WITH 40% DOWN PAYMENT

MAR 25 RECEIVED SUBSCRIPTION TO 4,000 PREFERENCE SHARES

AT P105 PER SHARE TOGETHER WITH 40% DOWN PAYMENT

AUG 20 RECEIVED 20% OF THE SUBSCRIPTION PRICE ON FEB 20

TRANSACTION.

SEPT 25 RECEIVED THE BALANCE OF THE SUBSCRIPTION PRICE ON

MARCH 25 TRANSACTION AND ISSUED A STOCK CERTIFICATE

OCT 10 ISSUED 4,000 ORDINARY SHARES FOR EQUIPMENT WITH A

FAIR VALUE OF P240,000

DEC 31 CLOSED THE P300,000 CREDIT BALANCE OF INCOME SUMMARY

TO RETAINED EARNINGS

REQUIRED:
A. - PREPARE JOURNAL ENTIES TO RECORD THE ABOVE TRANSACTIONS
B. - PREPARE THE STOCKHOLDERS' EQUITY SECTION AS OF DEC 31, 2018

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

START YOUR ANSWER ON ROWS BELOW.

ANSWER/ SOLUTION:

A. - PREPARE JOURNAL ENTRIES TO RECORD THE ABOVE TRANSACTIONS

B. - PREPARE THE STOCKHOLDERS' EQUITY SECTION AS OF DEC 31, 2018

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: