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  • GALVE - Solution 2

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    DERYL GALVE
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    1. The document outlines two methods, memorandum and journal entry, for recording share capital transactions on January 1st and February 1st of 20x1 for a company with authorized capital of ₱2,000,000 divided into 10,000 shares with a par value of ₱200 per share. 2. On January 1st, under both methods, ₱125,000 cash is received for a 25% subscription of 2,000,000 shares. 3. On February 1st, an additional ₱300,000 cash is received for a further subscription, bringing the total subscribed share capital to ₱400,000 under both methods.

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    1. The document outlines two methods, memorandum and journal entry, for recording share capital transactions on January 1st and February 1st of 20x1 for a company with authorized capital of ₱2,000,000 divided into 10,000 shares with a par value of ₱200 per share. 2. On January 1st, under both methods, ₱125,000 cash is received for a 25% subscription of 2,000,000 shares. 3. On February 1st, an additional ₱300,000 cash is received for a further subscription, bringing the total subscribed share capital to ₱400,000 under both methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Download as docx, pdf, or txt
    9 views1 page

    GALVE - Solution 2

    Uploaded by

    DERYL GALVE
    1. The document outlines two methods, memorandum and journal entry, for recording share capital transactions on January 1st and February 1st of 20x1 for a company with authorized capital of ₱2,000,000 divided into 10,000 shares with a par value of ₱200 per share. 2. On January 1st, under both methods, ₱125,000 cash is received for a 25% subscription of 2,000,000 shares. 3. On February 1st, an additional ₱300,000 cash is received for a further subscription, bringing the total subscribed share capital to ₱400,000 under both methods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    1.

    Solutions:
    Requirement (a):
    Jan. 1, 20x1
    Memorandum method Journal entry method
    Memo entry – Authorized capitalization is ₱2,000,000 divided into 10,000 shares with par Unissued share capital     2M
    value per share of ₱200.        Authorized share capital     2M

    Cash                                     125K Cash                                    125K


    (2M x 25% x 25%)              (2M x 25% x 25%)              
    Subscription receivable     375K Subscription receivable    375K
          Subscribed share capital         500K       Subscribed share capital        
           (2M x 25%)   500K
            (2M x 25%)                                 

    Feb. 1, 20x1
    Memorandum method Journal entry method
    Cash                                 300K* Cash                                  300K*
           Subscription receivable                Subs. receivable                 
    300K       300K      
    Subscribed share capital    400K Subscribed share capital  400K
           Share capital                            400K            Unissued share capital        400K

    * Subscription price of 2,000 shares (2,000 x ₱200) 400,000


       Portion already paid (400,000 x 25%)    (100,000)
       Balance collected 300,000

    Feb. 28, 20x1


    Memorandum method Journal entry method
    Cash (1,000 x ₱200)             200K Cash (1,000 x ₱200)             200K
           Share capital                                     Unissued share capital
    200K 200K

    Requirement (b):
    Memorandum method  Journal entry method 
    Share capital 600,000 Authorized sh. capital 2,000,000
    Subscribed sh. capital 100,000 Unissued sh. capital (1,400,000)
    Subs. receivable (75,000) Issued share capital 600,000
    Subscribed sh. capital 100,000
    Subs. receivable (75,000)
    625,00
    Total Share capital 0 Total Share capital 625,000

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