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    ch10 Problems

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    Von Edrian Paguio
    1. The document contains journal entries for various share transactions of two companies, including issuance of shares, sale of treasury shares, conversion of shares, and dividends declared. 2. It also shows the calculation of shareholders' equity, separating it into contributed capital, retained earnings, treasury shares, and appropriated retained earnings. 3. The last problem shows a statement of changes in shareholders' equity for a company over a fiscal year, including transactions such as issuance and retirement of shares, purchase of treasury shares, share split, and declaration of dividends.

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    ch10 Problems

    Uploaded by

    Von Edrian Paguio
    39 views8 pages
    1. The document contains journal entries for various share transactions of two companies, including issuance of shares, sale of treasury shares, conversion of shares, and dividends declared. 2. It also shows the calculation of shareholders' equity, separating it into contributed capital, retained earnings, treasury shares, and appropriated retained earnings. 3. The last problem shows a statement of changes in shareholders' equity for a company over a fiscal year, including transactions such as issuance and retirement of shares, purchase of treasury shares, share split, and declaration of dividends.

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    1. The document contains journal entries for various share transactions of two companies, including issuance of shares, sale of treasury shares, conversion of shares, and dividends declared. 2. It also shows the calculation of shareholders' equity, separating it into contributed capital, retained earnings, treasury shares, and appropriated retained earnings. 3. The last problem shows a statement of changes in shareholders' equity for a company over a fiscal year, including transactions such as issuance and retirement of shares, purchase of treasury shares, share split, and declaration of dividends.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    39 views8 pages

    ch10 Problems

    Uploaded by

    Von Edrian Paguio
    1. The document contains journal entries for various share transactions of two companies, including issuance of shares, sale of treasury shares, conversion of shares, and dividends declared. 2. It also shows the calculation of shareholders' equity, separating it into contributed capital, retained earnings, treasury shares, and appropriated retained earnings. 3. The last problem shows a statement of changes in shareholders' equity for a company over a fiscal year, including transactions such as issuance and retirement of shares, purchase of treasury shares, share split, and declaration of dividends.

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    © All Rights Reserved
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    Download as xlsx, pdf, or txt
    of 8

    PROBLEM 10-1

    1) a PSC  Subscription Receivable (10,000 sh x P125) 1,250,000


    OSC  Subscription Receivable (20,000 sh x P60) 1,200,000
        PSC Subscribed (10,000 sh x P100)
        OSC Subscribed (20,000 sh x P50)
        Preference Share Premium 
        Ordinary Share Premium  
    Cash 1,225,000
        PSC Subscription Receivable (P1,250,000 x 50%)
        OSC  Subscription Receivable   (1,200,000 x 50%)
    b. Cash 1,225,000
        PSC Subscription Receivable
        OSC Subscription Receivable

    PSC Subscribed 1,000,000


    OSC  Subscribed 1,000,000
        Preference Share Capital
        Ordinary Share Capital
    c. Treasury Shares - Ordinary Share Capital (2,500 sh x P50) 125,000
        Cash

    d. Preference Share Capital (3,000 sh x P100) 300,000


    Preference Share Premium  (3,000 x P25) 75,000
        Ordinary Share Capital (3,000 sh x P50)
        PIC from Conversion of PSC into OSC

    e. Cash (1,500 sh x P65) 97,500


        Treasury Shares  (1,500 sh x P50)
        PIC from Sale of Treasury Shares

    f. Received 2,000 ordinary  shares as donation from a major shareholder

    g. Cash (2,000 x P56) 112,000


        Donated Capital

    h. Cash (1,000 sh x P60) 60,000


        Treasury Shares (1,000 sh x P50)
        PIC from Sale of Treasury Shares

    i. Ordinary Share Capital, P50 par (23,000 x P50) 1,150,000


    Ordinary Share Premium 200,000
        Ordinary Share Capital, P30 stated value (23,000 sh x
    P30)
        PIC from Exchange of Par for No-Par Shares 
    j. Income Summary 1,500,000
        Retained Earnings

    k. Retained Earnings 93,000


        Dividends Payable
              PS =   7,000 sh x P100 x 10% = P70,000
              CS = 23,000 sh x P1                =   23,000
    2) SHAREHOLDER'S EQUITY
    Contributed Capital:
        Share Capital:
    10% Preference Share Capital, P100 par, 20,000 shares
    authorized, 7,000 shares issued and outstanding

    Ordinary Share Capital, P30 stated value, 50,000


    shares authorized, 23,000 shares issued and outstanding
      
    Additional Paid-in Capital:
    Preference share Premium
    Paid-in Capital from Exchange of Par for No-Par  Shares 
    Paid-in Capital from Sale of Treasury Shares
    Paid-in Capital from Conversion of PSC into OSC
    Donated Capital
                Total Contributed Capital
    Retained Earnings
    Total Shareholders’ Equity

    PROBLEM 10-2
    1)
    a. Treasury Shares – Ordinary SC (5,000 sh x P16) 80,000
        Cash

    Retained Earnings 80,000


          Retained Earnings Appropriated for Treasury Shares 

    b. Preference Share Capital (10,000 sh x P100) 1,000,000


    Preference Share Premium (10,000 sh x P5) 50,000
        PIC from  Conversion of PSC into  OSC 
        Ordinary Share Capital (10,000 x 4 x P20)

    c. Accounts Payable 12,500


        Ordinary Share Capital (500 sh x P20)
        Ordinary Share Premium

    d. Retained Earnings 571,000


        Dividends Payable
          PSC= 40,000 x P100 = P4,000,000 x 5%  =       P200,000
          OSC = (150,000 + 40,000 + 500 – 5,000) x P2 =P371,000

    e. Land 50,000
        Treasury Shares (2,000 sh x P16)
          PIC from Sale of Treasury Shares

    Retained Earnings Appropriated for treasury Shares 32,000


          Retained Earnings

    f. Ordinary Share Capital, P20 par(150,000 + 40,000 + 500) x P 3,810,000


        Ordinary Share Capital, P10 par

    g. Income Summary 200,000


        Retained Earnings

    2
    Contributed Capital:
        Share Capital:
    5% Preference Share Capital, P100 par, 40,000 shares  
          issued and outstanding ₱ 4,000,000
    Ordinary Share Capital, P10 par,  381,000 shares issued, 
          378,000 shares outstanding, 3,000 shares in treasury 3,810,000
    Additional Paid-in Capital:
    Preference Share Premium ₱ 200,000
    Ordinary Share Premium 752,500
    Paid-in Capital from Sale of Treasury Shares 18,000
    Paid-in Capital from Conversion of PSC  into OSC 250,000
    Total Contributed Capital
    Retained Earnings:
            Retained Earnings Appropriated for treasury Shares ₱ 48,000
            Unappropriated Retained Earnings 1,081,000
    Total Contributed Capital and Retained Earnings
    Less Treasury Shares at Cost (3,000 shares)
    Total Shareholders’ Equity

    PROBLEM 10-3
    SHAREHOLDERS’ EQUITY
    Contributed Capital:
    Share Capital:
    10%  Preference Share Capital, P50 par, 115,000  
          shares issued and outstanding ₱ 5,750,000
    Ordinary Share Capital, P5 par, 2,050,000 shares 
          issued, including 5,000 shares in the treasury 10,250,000
    Additional paid-in capital:
    Preference Share Premium ₱ 1,150,000
    Ordinary Share Premium 5,375,000
    Paid-in Capital from Sale of Treasury Shares 30,000
    Total Contributed Capital
    Retained Earnings:
            Retained Earnings Appropriated for Treasury Shares ₱ 70,000
            Unappropriated Retained Earnings 4,310,000
    Total Contributed Capital and Retained Earnings
    Less Treasury Shares, at cost (5,000 shares)
    Total Shareholders’ Equity

    PROBLEM 10-4
    Assets Liabilities SE
    1 D NE D
    2 I NE I
    3 I NE I
    I NE I
    4 NE NE NE
    *The indicated loss may be debited to the APIC arising from sale of the treasury Share Capital in No. 2 or such  in

    PROBLEM 10-5
    Javier Company
    Statement of Changes in Shareho
    For the Fiscal Year Ended June

    Preference Shares
    Balances, June 30, 2013 ₱ 3,000,000
    Issuance of 5,000 PSC @ P140 500,000
    Issuance of 20,000 OSC @ P70
    Retirement of 1,000 PSC @ P150 (100,000)
    Purchase of  5,000 TS @ P80
    Share   split of 2 for 1
    Reissuance of TS @ P52
    Declaration of dividends
      PSC = P3,400,000 x 10%
      OSC = 235,000 x P6
    Profit for the year
    Balances, June 30,  2014 ₱ 3,400,000
    1,000,000
    1,000,000
    250,000
    200,000

    625,000
    600,000

    625,000
    600,000

    1,000,000
    1,000,000

    125,000

    150,000
    225,000

    75,000
    22,500

    der

    112,000

    50,000
    10,000

    690,000
    660,000
    1,500,000

    93,000

    ₱ 700,000

    690,000 ₱ 1,390,000

    ₱ 175,000
    660,000
    32,500
    225,000
    112,000 1,204,500
    ₱ 2,594,500
    1,407,000
    ₱ 4,001,500

    80,000

    80,000

    250,000
    800,000

    10,000
    2,500

    571,000
    32,000
    18,000

    32,000

    3,810,000

    200,000

    ₱ 7,810,000

    1,220,500
    9,030,500

    1,129,000
    ₱ 10,159,500
    48,000
    ₱ 10,111,500

    ₱ 16,000,000
    6,555,000
    22,555,000
       

    4,380,000
    ₱ 26,935,000
    70,000
    ₱ 26,865,000

    APIC RE Profit
    NE NE NE
    I NE NE
    D* NE* NE    
    NE* D* NE
    D D NE
    pital in No. 2 or such  indicated loss may be debited to retained earnings.

    Javier Company
    nt of Changes in Shareholders’ Equity
    e Fiscal Year Ended June 30, 2014

    Outstanding Shares APIC Retained Earnings Treasury Shares


    ₱ 1,000,000 ₱ 9,200,000 ₱ 2,550,000
    200,000
    200,000 1,200,000
    (40,000) 100,000
    400,000

    60,000 (200,000)

    (300,000)
    (1,410,000)
    750,000
    ₱ 1,200,000 ₱ 10,620,000 ₱ 1,540,000 ₱ 200,000

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