CANVAS ACTIVITY 1

X Company made the following transactions:

A. Received subscription of 10,000 preference shares with par value of 45 for 65 per share.
Received 25% the next day and 30% after three days.
B. Received subscription of 25,000 ordinary shares with par value of 7.50 for 200,000. received the
following payments- 75,000 and 50,000.

Required: Compute for the legal capital of each transaction and prepare all journal entries needed to
record the transactions above.

A.

Legal Capital = 450,000

Subscriptions Receivable 650,000

Subscribed Preference Shares 450,000
Share Premium-P/S 200,000
Cash 162,500
Subscriptions Receivable 162,500
Cash 195,000
Subscriptions Receivable 195,000

B.

Legal Capital = 187,500

Subscriptions Receivable 200,000

Subscribed Ordinary Shares 187,500
Share Premium-O/S 12,500
Cash 75,000
Subscriptions Receivable 75,000
Cash 50,000
Subscriptions Receivable 50,000