CHAPTER 6

Ex 1.
1. a)
Revenues from Sales 1,600,000
Revenue from Rent 150,000
Cost of Sales 800,000
Case A Owner’s
Selling Equity:
Expenses 190,000
Artuz, Capital
Administrative Expenses P1,153,000 130,000
Interest Expense 25,000
Case B Partners’
IncomeEquity:
Summary 605,000
Artuz, Capital(600 +213) P 813,000
Case A Cruz, Summary
Income Capital (400 + 152) 552,000
605,000
Artuz, Drawings 605,000
Case C Shareholders’ Equity:
Share
Artuz, Capital
Drawings P1,500,000
653,000
Retained Earnings
Artuz, Capital 598,500 653,000
(175,000 + 423,500)
Total SHE P2,098,500
Case B Income Summary 605,000
Ex Artuz, Drawings 363,000 2.
Cruz, Drawings A) No Par B) P50
242,000 Par Value Stock C)P60 Stated Value Stock
Cash P800,000 P800,000 P800,000
Share Capital
Artuz, Drawings P800,000
213,000 P750,000 P 600,000
Share Premium
Cruz, Drawings 152,000 50,000
Paid in Excess
Artuz,ofDrawings
SV 213,000 200,000
Cruz, Drawings 152,000

Ex. Case C Income Summary 181,500 3

a) Cash
Taxes Payable 2,750,000 181,500
Share Capital 2,750,000
Income Summary 423,500
b) Cash
Retained Earnings 500,000 423,500
Share Capital 400,000
Paid In Excess of SV 100,000

c) Inventory 300,000
Share Capital 280,000
Share Premium 20,000

d. Equipment 255,000
Notes Payable 100,000
Share Capital 155,000

a) P2,750,000/50 par= 55,000 shares were issued

b) P155,000 / 100 par= 1,550 shares were issued

Ex. 4
a) Cash (20,000 x P25) 500,000
Share Capital 400,000
Share Premium 100,000

b) Land 1,250,000
60,000 sh Share Capital 1,200,000
Share Premium 50,000

c) Organization Cost 120,000

6,000 sh Share Capital 120,000
Total Shares issued: 86,000
Paid in Capital at Par: P1,720,000
Additional Paid in Capital: P150,000

Ex. 5
MEMO ENTRY METHOD 6. JOURNAL ENTRY METHOD
Feb 1 Authorized to issue 1,000,000 shares, Unissued Share Capital 10,000,000
P10 par value Authorized Share Capital 10,000,000

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 Subscription Receivable 3,000,000 Subscription Receivable 3,000,000
Subscribed Share Capital 3,000,000 Subscribed Share Capital 3,000,000
75,000 x P10 x 4 Cash 1,050,000
Cash 1,050,000 Subscription Receivable 1,050,000
Subscription Receivable 1,050,000

1,500 x .2= 300,000

1,500 x .5= 750,000
Feb 14 Cash 1,920,000 Cash 1,920,000
Share Capital 1,600,000 Unissued share capital 1,600,000
Share Premium 320,000 Share Premium 320,000
Mar 14 Land 3,500,000 Land 3,500,000
Share Capital 3,200,000 Unissued share capital 3,200,000
Share Premium 300,000 Share Premium 300,000
Apr 28 Organization Cost 50,000 Organization Cost 50,000
Share Capital 45,000 Unissued share capital 45,000
Share Premium 5,000 Share Premium 5,000

30 Cash 1,200,000 Cash 1.200,000

Subscription Receivable 1,200,000 Subscription Receivable 1,200,000

Subscribed Share Capital 1,500,000 Subscribed Share Capital 1,500,000

Share Capital 1,500,000 Unissued Share Capital 1,500,000

Best Securities Corp. Best Securities Corp.

Shareholders’ Equity Section Shareholders’ Equity Section
Paid In Capital Paid In Capital
Authorized to issue 1,000,000 shares Authorized 1,000,00 shares
Issued 634,500 shares P6,345,000 At par P 10 P10,000,000
Subscribed 150,000 1,500,000 Less Unissued Share Capital 3,655,000
Less Subs Recble. 750,000 750,000 Issued and Outstanding 634,500 6,345,000
Addtl Paid In Capital Subscribed15,000 P1,500,000
Share Premium 625,000 Less Subs. Recble 750,000 750,000
Retained Earnings (org cost) ( 50,000) Share Premium 625,000
Total Shareholders’ Equity P7,670,000 Retained Earnings (organization cost) ( 50,000)
Total Shareholders’ Equity P7,670,000

7. A) Subscription at a premium: C) Issuance of Stock Certificate for

Subscription Receivable 240,000 Subscribed shares fully paid
Subscribed Share Capital 200,000 Subscribed Share Capital 150,000
Share Premium 40,000 Share Capital 150,000
B) Collection of Subscription: D) Stocks sold at a premium
Cash 160,000 Cash 540,000
Subscription Receivable 160,000 Share Capital 500,000
Share Premium 40,000

8. a) Authorized shares 500,000 c). 1,000 subscribed = recble 500 + cash 500= 2,000
Less:Issued Shares 120,000 Cash 200,000
Unissued Shares 380,000 Subscription Recble 800,000
Subscribed 100,000 Subscribed Share Capital 1,000,000
b) Still Available for d) Properties 1,560,000
subscription Share Capital 1,200,000
P280,000 Share Premium 360,000
e) Cash 300,000
Subscription Receivable 300,000

Subscribed
9. a. Share Capital Share Capital Share Premium Ret Earnings
Balances P 1,200,000 P1,000,000 P 360,000
1) Sold 1,000 10,000 2,000
2)Subscribed 10,000 P 100,000 50,000
3) Issued 10,000 100,000 (100,000)
4) Issued 100,000 1,000,000 (1,000,000)
4) Issued 5,000 50,000 (50,000)
Net Income 300,000
P 2,360,000 P 50,000 P 412,000 P 200,000
Entries: 12,000
Cash
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1
Share capital 10,000
Share Premium 2,000
2 Cash 37,500
Subscription Receivable 112,500
Subscribed Share Cap 100,000
Share Premium 50,000
3 Organization Cost 100,000
Share Capital 100,000
4 CASH 500,000
Subscription Recble 500,000
Subscribed 1,000,000
Share Capital 1,000,000
5 Cash 56,250
Subscription Recble 56,250
Subscribed 50,000
Share Capital 50,000
6 Income Summary 300,000
Retained Earnings 300,000

9. b. Share Capital Shares d) Share Capital P 2,360,000

Authorized P 5,000,000 500,000 Subscribed Share Capital 50,000
Issued 2,360,000 236,000 Legal Capital P 2,410,000
Unissued 2,640,000 264,000
Subscribed 50,000 5,000
c) Available For
Subscription 2,590,000 259,000

Ex.10 a) Authorized 100,000 x 50= P5,000,000

b) Subscribed 25,000
Available for subscription 75,000 shares
c) 11,500 shares were issued to Levi, Amboy and Inocencio
d) None, the remaining incorporators paid up more than 50% already

11.A. Journal Entries (Memo Entry Method)

Oct. 1 Authorized to issue 500,000 shares, P50 par value

Subscription Receivable 9,000,000

Subscribed Share Capital 9,000,000

Cash 2,150,000
Subscription Receivable 2,150,000

Nov. 5 Organization Cost 150,000

Share Capital 150,000

10 Cash 600,000
Share Capital 500,000
Share Premium 100,000

Dec 01 Cash 3,425,000

Subscription Receivable 3,425,000

20 Subscription Receivable 6,600,000

Subscribed Share Capital 6,000,000
Share Premium 600,000

Cash 1,650,000
Subscription Receivable 1,650,000

26 Land 3,000,000
Share Capital 2,750,000
Share Premium 250,000

28 Cash 2,050,000
Subscription Receivable 2,050,000

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 Subscribed Share Capital 5,500,000
Share Capital 5,500,000

P 2,150,000l

Health Spa
Shareholders’ Equity
Paid In Capital
Authorized to issue 500,000 shares,
P50 par value share capital
(178,000 shares) P8,900,000
Subscribed Share Capital
(190,000 shares) P 9,500,000
Less: Subscription Receivable 6,325,000 3,175,000
Additional Paid In Capital
Share Premium 950,000
Retained Earnings (org cost) (150,000)
Total Shareholders’ Equity P12,875,000

c. Legal Capital (8,900,000+ 3,175,000) P 12,075,000

d. Unissued Shares 322,000
e. Shares still available for Subscription 132,000

Ex 12. a. Journal Entries

Mar 1 Unissued Share Capital 10,000,000
Authorized Share Capital 10,000,000

Cash 750,000
Subscription Receivable 2,250,000
Subscribed Share Capital 3,000,000

Mar 3 Cash 420,000

Unissued Share Capital 400,000
Share Premium 20,000

4 Subscription Receivable 324,000

Subscribed Share Capital 300,000
Share Premium 24,000

Cash 81,000
Subscription Receivable 81,000

10 Organization Cost 100,000

Cash 100,000

12 Land 550,000
Unissued Share Capital 500,000
Share Premium 50,000

30 Cash 1,125,000
Subscription Receivable 1,125,000
2,250,000 x .5= 1,125,000
March 31 Cash 297,500
Subscription Receivable 297,500
8,500 x 100= 850,000 x.7= 595,000 x .5

Subscribed Share Capital 850,000

Unissued Share Capital 850,000
April 20 Cash 162,000
Subscription Receivable 162,000
2,000 x 108 x .75
200,000
Subscribed Share Capital 200,000
Unissued Share Capital

June 30 Income Summary 375,500

Retained Earnings 375,500
Unissued
12.b. Authorized Share Capital Subscribed Share Retained
10,000,000 10,000,000 Share Capital Premium Earnings
Mar. 1 30,000 shares subscribed 3,000,000
3 4,000 shares sold (400,000) 20,000
4 3,000 shares subscribed 300,000 24,000
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 10 Organization expenses (100,000)
12 5,000 shares issued (500,000) 50,000

Mar 31 25,000 shares issued (850,000) (850,000)

June 20 2,000 shares issued (200,000) (200,000)
30 Net income       375,500
10,000,000 P 8,050,000 2,250,000 P 94,000 P275,500

13. A. Journal Entries (Memorandum Method)

Apr. 1 Authorized to issue 150,000 shares of
P50 stated value common shares

Cash (40,000 x P50) 2,000,000

Ordinary Share Capital 2,000,000

30 Organization Cost (300 x P50) 19,500

Ordinary Share Capital 15,000
PIC – In excess of Stated Value 4,500

May 1 Organization Cost 50,000

Cash 50,000

May 13 Building 1,500,000

Land 1,000,000
Ordinary Share Capital (40,000 x P50) 2,000,000
PIC In Exc of SV 500,000

July 18 Cash 640,000

Ordinary Share Capital 500,000
PIC – In excess of Stated Value 140,000

Dec 20 Subscription Receivable (4,500 x P72) 324,000

Subscribed Ordinary Share Capital 225,000
PIC – In excess of Stated Value 99,000
Cash 162,000
Subscription Receivable 162,000

31 Revenues 1,000,000
Expenses 750,000
Income and Expense Summary 250,000

Income and Expense Summary 75,000

Taxes Payable 75,000

Income & Expense Summary 175,000

Retained Earnings 175,000
B. Shareholders’ Equity
Paid In Capital
Ordinary Share Capital, authorized 150,000 shares of
P50 no Par, stated value, issued and outstanding 90,300 P4,515,000
Subscribed 225,000
Addtl Paid In Capital 743,500
PIC- In Excess of Stated Value
Retained Earnings 175,000
Total Shareholders’ Equity P5,535,500

C. Legal Capital (4,740,000+743,500) P4,954,000

14 A. Journal Entries (Memo Entry Method)

Mar 1 Authorize to issue 500,000 shares, par P50

Subscription Receivable 6,750,000

Subscribed Share Capital 6,750,000

Cash 1,825,000
Subscription Receivable 1,825,000

5 Land 1,750,000
Share Capital 1,500,000
Share Premium 250,000
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 10 Cash 550,000
Share Capital 500,000
Share Premium 50,000

15 Cash 725,000
Subscription Receivable 725,000

25 Cash 475,000
Subscription Receivable 475,000

Subscribed Share Capital 1,250,000

Share Capital 1,250,000

28 Subscription Receivable 1,200,000

Subscribed Share Capital 1,000,000
Share Premium 200,000

Cash 300,000
Subscription Receivable 300,000

29 Merchandise inventory 900,000

Subscription Receivable 900,000

Subscribed Share Capital 1,000,000

Share Capital 1,000,000

Shareholder’s Equity
Authorized 500,000 shares with P50 par
Issued and Outstanding shares, 85,000 shares 4,250,000

Subscribed Share Capital, (110,000 shares) P5,500,000

Less: Subscription Receivable 3,725,000 1,775,000
Total 6,025,000
Additional Paid In Capital
Share Premium 500,000
Total Shareholders’ Equity P6,525,000

c. SHAREHOLDERS’ JOURNAL
CERTIFICATE CANCELLED CERTIFICATE ISSUED Total Signatures Subject
Date By whom Ledger Cert. No. of Left In whose Ledger No. No. of No. of to By Laws of
surrendered Folio No. Shares by name Folio Cert. Shares Shares Corp
3/5 Macdo 3 001 30,000 30,000
5 Tia Maria 4 002 10,000 40,000
25 King 2 003 25,000 65,000
28 Starbox 1 004 20,000 85,000
30 King 3 003 25,000 King King 2 005 15,000
30 Henwa 5 006 10,000 85,000

SHAREHOLDERS’ LEDGER
Name : Starbox
Address: Page 1
CERTIFICATE CANCELLED CERTIFICATE ISSUED
Journal No. of Journal No. of
Date Folio No. Cert. shares Date Folio No. Cert. Shares
Mar. 28 1 004 20,000

Name : King
Address: Page 2
CERTIFICATE CANCELLED CERTIFICATE ISSUED
Journal No. of Journal No. of
Date Folio No. Cert. shares Date Folio No. Cert. Shares
Mar 25 1 003 25,000
Mar. 30 1 003 25,000 Mar. 30 1 005 15,000

Name : Macdo
Address: Page 3
CERTIFICATE CANCELLED CERTIFICATE ISSUED
Journal No. of Journal No. of
Date Folio No. Cert. shares Date Folio No. Cert. Shares
Mar. 5 1 001 30,000
Name : Tia Maria
Address: Page 4
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 CERTIFICATE CANCELLED CERTIFICATE ISSUED
Journal No. of Journal No. of
Date Folio No. Cert. shares Date Folio No. Cert. Shares
Mar. 10 1 002 10,000

Name : Henwa
Address: Page 6
CERTIFICATE CANCELLED CERTIFICATE ISSUED
Journal No. of Journal No. of
Date Folio No. Cert. shares Date Folio No. Cert. Shares
Mar. 30 1 006 10,000

SUBSCRIBERS’ LEDGER
Name : Burgee
Address: Page 1
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 20,000 3 1,000,000 Mar. 1 1 200,000

Name : Dominic
Address: Page 2
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 25,000 3 1,250,000 Mar. 1 1 250,000

Name : Jolly
Address: Page 4
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 20,000 3 1,000,000 Mar. 1 1 500,000
15 2,000 2 250,000

Name : King
Address: Page 5
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 25,000 3 1,250,000 Mar. 1 1 300,000
15 2 475,000
25 25,000 3 475,000

Name : Wendy
Address: Page 6
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 25,000 3 1,250,000 Mar. 1 1 275,000

Name : Shake It
Address: Page 7
STOCK SUBSCRIBED STOCK PAYMENT
No. of No. of No. of What Amount
Date Shares Installment Value Date Shares Installment Paid
Mar. 1 20,000 3 1,000,000 Mar. 1 1 300,000

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