1. Ocean Company was organized at the beginning of the current year and was authorized to issue share capital of 100,000 shares of P50 par value. The following transactions occurred during the current year in connection with the share capital: 1. The incorporators subscribed for 25% of the authorized share capital at par value. 2. The incorporators paid 25% on their subscription. 3. Full payment was received on 15,000 shares originally subscribed. 4. Land with fair value of P600,000 was acquired upon issuance of 10,000 shares. The market value of the share at this time is P55. 5. Cash subscription to 5,000 shares at P60 per share was received. 6. Issued 2,000 shares to the legal counsel in payment for his P100,000 bill for organization services. REQUIREMENT A: Prepare journal entries to record the transactions using the memorandum method. REQUIREMENT B: Present the shareholders' equity in the statement of financial position.

2. Aroma Company reported the following shareholders' equity: Ordinary share capital, 50,000 shares at P100 par P5,000,000: Share premium P200,000: Retained earnings P2,000,000. Subsequently, the following transactions among others occured: A. Treasury shares of 5,000 were acquired at P160 per share. B. Assuming the treasury shares were reissued for P1,000,000. C. Assuming the treasury shares were reissued for P700,000. REQUIREMENT A: Prepare journal entries to record the transactions. REQUIREMENT B: Prepare journal entry to record the retirement of the treasury shares, assuming the treasury shares are not reissued. The original issue price of treasury shares was P104 per share. (Show your solutions)

3. On December 31, 2020, Zebra Company showed the following shareholders' equity: Share capital P100 par, 100,000 shares authorized, 50,000 shares issued P5,000,000: Share premium P1,000,000: Retained earnings P2,000,000: Treasury shares, 5,000 at cost P600,000. On December 31, 2020, Zebra Company declared a cash dividend of P30 per share to shareholders of record on January 15, 2021 and payable on January 31, 2021. REQUIREMENT: Prepare journal on December 31, 2020, January 15, 2021 and January 31, 2021. (Show your solutions)