PARTNERSHIP AND CORP ACCTG

Journal Entries

BY: PROF. VERLITA V. MERCULLO , C.P.A.

 STOCKHOLDERS EQUITY
CAPITAL STOCK 1,000 SHARES @ 100 per share ( par
value )
25% SUBSCRIBED STOCK OF CAPITAL STOCK
25% X 1000 = 250 SHARES SUBSCRIBED
25% OF SUBSCRIBED IS PAID UP CAPITAL
25% x 250 = 62.5 SHARES
 STOCKHOLDERS EQUITY
Common Stock Issued and Outstanding
( Capital Stock 1000 @ 100 par value)
Paid up Capital 62,500
Subscribed Capital 187,500
 DIVIDENDS
STOCKHOLDERS EQUITY
( SINGLE PROP) NET INCOME = 100,000 GOES TO OWNER
(PARTNERSHIP-A AND B) MR. A 50K
MR. B 50K
CORPORATION = NET INCOME 100,000 ( IF NET INCOME WILLB
E SHARED TO STOCKHOLDERS, ITS CALLED DIVIDENDS
IN CORPORATION , NOT ALL NET INCOME IS SHARED TO
SHAREHOLDERS
NET INCOME IS SAVED TO RETAINED EARNINGS
 STOCKHOLDERS EQUITY
YEAR Net income dividends retained
earnings
2018 100,000 0 100,000
2019 200,000 50,000 250,000
2020 250,000 100,000 400,000
550,000 150,000
• Dividends: payment to shareholder from the earnings of the corporation
• 3 important dates:
1. Date of Declaration- approval for payment of dividend
2. Date of Record - date stating that all those shareholders on date of record
are the only one entitled to dividends.
3. Date of Payment.- actual distribution.
Illustration:
The board of directors passed a resolution approving dividend on
1/04/2021, declaring a P10 dividend to shareholders on record. 2/4/2021,
and released on march 4/2021 10,000 shares common ( 10 x 10,000 )
Journal Entries:
1/04/2021 Retained Earnings 100,000
Dividends Payable 100,0000
2/04/2021 No entry
3/04/2021 Dividends Payable 100,000
Cash 100,000
• Dividends: payment to shareholder from the earnings of the corporation
• 3 important dates:
1. Date of Declaration- approval for payment of dividend
2. Date of Record - date stating that all those shareholders on date of record
are the only one entitled to dividends. ( 1/04/21 date of declaration ; 2/4/21 –
date of record – Mr. A sold his share on 2/5/21 to Mr. B
Mr. A is still the shareholder at the date of record which is 2/4/21
Mr. A sold his share on 2/3/21 to Mr. B
Mr.B is now the shareholders at the date of record 2/4/21 because Mr. B acquired the share on
2/3/21
3. Date of Payment.- actual distribution.
Illustration:
The board of directors passed a resolution approving dividend on 1/04/2021, declaring a P10
dividend to shareholders on record. 2/4/2021, and released on march 4/2021 10,000 shares
common
Journal Entries:
1/04/2021 Retained Earnings 100,000
Dividends Payable 100,0000
2/04/2021 No entry
3/04/2021 Dividends Payable 100,000
Cash 100,000
• Illustration:
• Year 4 Dividends Declared P100,000
No dividend declared on y 1, y2, y 3
Preferred share 6% par at P50 ( preferred share is the first shareholder to get
dividends )
Outstanding preferred share 5,000 shares = 250,000 ( 50 x 5,000)
Step 1. 6% x 250,000 P 15,000 ( preferred )

Step2. Balance to common 85,000 ( 100,000-15,000)

Dividends declared /paid P 100,000
 THANK YOU

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