Memorandum method vs Journal Entry method

1. Entity A was incorporated at the start of the current period. The following were

Entity A's share capital transactions during the year:

a. The SEC approved Entity A's authorized capitalization of P3,000,0000 divided into

100,000 shares with par value of P30 per share.

b. Twenty-Five percent (25%) of the authorized capitalization was subscribed at par value

and twenty-five percent (25%) of the subciption price was paid on subcription date.

c. Received full paymet for 10,000 subscribed shares and issued the related share certifictes.

d. Received cash subscription for 15,000 additional shares at a subcription price of P40 per share

e. Received subscription for 10,000 additional shares at a subcription price of P50 per share

f. collected the full payment on the subscription in e' above and issued the related share certificate

Requirements:

a. provide the journal entries under (1) memorandum method and (2) Journal Entry Method.

b. Prepare the shareholder's equity of Entity A as of the end of the period.

Share Issuance Cost

2. Entity A issued 2,000 shares wih par value of P10 for P60 per share.

share issuance cost amounted to P8,000. how much is the net share premium

arising from the share issuance?

Provide the Journal Entry.

Accounting for Treasury shares

Use the following information for the next three questions:

Entity A's statement of financial position as of the beginning of the period shows

the following information:

Share Capital (P20 par value ) Php1,000,000

Share Premium 460,000

Retained Earnings 540,000

Total Shareholders equity 2,000,000

3. Entity A re acquires 5,000 shares for P30 each. Provide the Journal Entries, including the

related appropriation of retained earnings.

Case 1: Reissuance of treasury shares above cost

4. Entity A reissues 1,000 treasury shares for 45 each. Provide the journal entries, including the

related reversal of appropriation of retained earnings

Case:2 Reissuance of treasury shares below cost

5. Entity A reissues 1,000 shares for P20 each. Provide the journal entries, including the related

reversal of appropriation of retained earnings.

Provide the journal entry.

Accounting for Retirement Shares

Entity A's Statement of financial position as of the beginning of the period shows the following

information:

Share Capital (P20 par value) Php1,000,000

Share Premium 250,000

Retained Earnings 750,000

Total Shareholders equity 2,000,000

Case1: Retirement cost less than original issuance price

6. Entity A reacquires 5,000 share at par value and immidiately retires them.

Provide the journal entry.

Case#2 : Retirement cost greater than original issuance price.

7. Entity A reacquires 5,000 shares a P50 each and immidiately retires them

Provide the journal entry.

Donation from Shareholders

8. Entity A receives the following donations from a shareholders on December 25,20x1

a. Cash of P500,000

b. Equipment with historical cost of P900,000 and fair value of P700,000

c. 10,000 shares with par value of P100 and fair value of P210. the shares

were reissue on January 5, 20x2 for P220 each.

Provide the Journal Entries.