Question
Problem #1 (Adapted) Sunrise Corporation, a food company, was established on January 2, 2018. It is authorized to issue 100,000 shares of 6%, P50 par
Problem #1 (Adapted)
Sunrise Corporation, a food company, was established on January 2, 2018. It is authorized to issue 100,000 shares of 6%, P50 par value preference shares, and 600,000 shares of no par value ordinary shares with a stated value of P5 per share. It made the following share transactions during the year:
February 12 | Issued 120,000 ordinary shares for cash at P6 per share. |
March 2 | Issued 30,000 preference shares at par for cash. |
March 24 | Issued 100,000 ordinary shares for a piece of land as future building site. The asking price for the land was P700,000. The fair value was P600,000. |
April 18 | Issued 200,000 ordinary shares for cash at P7 per share. |
November 15 | Issued 10,000 preference shares for cash at P54 per share. |
Required:
Problem #2 (Adapted)
GHI Corporation, a distributor of various beauty products, was authorized to issue 10,000 6%, P100 par preference shares and 40,000 P50 par ordinary shares. During its first year of operations, it engaged in the following selected transactions:
January 5 | Issued 10,000 ordinary shares at par for cash. |
January 15 | Issued 2,500 preference shares at par for cash. |
February 10 | Paid P6,000 cash for costs incurred in forming and organizing a corporation. |
February 20 | Received subscription to 20,000 ordinary shares at P60 per share together with the 40% down payment. |
March 25 | Received subscription to 4,000 preference shares at P105 per share together with the 40% downpayment. |
August 20 | Received 20% of the subscription price on Feb 20 transaction. |
September 25 | Received the balance of the subscription price in March 25 transaction and issued the stock certificate. |
October 10 | Issued 4,000 ordinary shares for equipment with a fair value of P240,000. |
December 31 | Closed the P300,000 credit balance of the income summary to retained earnings. |
Required:
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