I. True or False.

$1.$ The equity of the owners of a corporation is called stockholders' equity.

$2.$ In terms of capitalization, the partnership can raise more capital than a corporation.

$3.$ The Paid$-$in Capital section in the balance sheet of a corporation shows the amount contributed by the owners.

$4.$ If a corporation issues only one class of stock, this is the Preferred Stock.

$5.$ A no$-$par value stock can be sold even at P$1.$

$6.$ The price paid in excess of the par value of the capital stock is called premium.

$7.$ A corporation is allowed to show in its balance sheet, the result of an upward revaluation of its assets.

$8.$ Authorized shares represent only the unissued shares.

$9.$ Treasury stock represent issued shares but later reacquired and cancelled.

$10.$ A corporation is authorized to sell its stocks either for cash or other assets.

II$.$ Exercises.

The XYC Co$.$ has been authorized to issue $5,000$ shares of $10\%,$ Preferred stocks at P$50$ par value and $50,000$ Common Shares at P$10$ par value. All the shares have been issued and outstanding. At the end of the year the company incurred a deficit of $P15,000.$

Required: Prepare the Stockholders' Equity section of the Company's balance sheet.

The following transactions were completed by ABC Co$.$:

Jan. $5$ Received authorization to issue the following: $50,000$ shares of $10\%$ Preferred at P$60$ par value; and $100,000$ Common shares at $P75$ par value.

Jan. $15$ Received subscriptions for $25,000$ shares of Preferred shares at P$60$ per share.

Jan. $15$ Received subscriptions from incorporators, $60,000$ shares of Common at P$8$ per share.

Jan. $20$ Received full payment from subscribers of Preferred shares. Stock certificates were issued.

Jan. $20$ Received full payment from subscribers of Common shares. Stock Certificates were issued.

Jan. $31$ Paid $5,000$ for organization costs.

Required: Record the above transactions, using:

memorandum entry method

journal entry method