Problem 2

Oricon Paper Corporation started its business on May 1, 2018. Based on its Articles of Incorporation the corporation is authorized to issue 500,000 ordinary shares with P 20 par value per share. Presented below is the corporations contributed capital as of December 31, 2018:

Ordinary Share Capital P 3,000,000

Ordinary Share Premium 750,000

Question:

How many shares were issued as of December 31, 2018? Based on the given balances as of December 31, 2018, how much is the original issued price per share? Assuming all issued shares were sold for the same price.

Transactions occurred during January to May 2019:

Jan 08 Received subscription for 200,000 shares at P 30 per share with 70% down payment. The balance is payable until

Feb 05.

Jan 19 Received the full payment of 80,0000 subscribed shares and issued stock certificate.

Jan 22 The subscriber of 70,000 subscribed shares notify the corporation that he will not be able to settle the remaining balance. Therefore, the subscription is declared as delinquent.

Jan 24 The corporation paid P 8,000 relevant to the sale of delinquent shares. The Highest Bidder agreed to received 30,000 shares and pay the incidental costs to sell the delinquent shares.

Jan 28 Received the payment of Highest Bidder and issued the stock certificate as follows: 30,000 shares Highest bidder

and 40,000 shares Defaulting subscriber.

Feb 10 The corporation declared the 50,000 subscribed shares as delinquent.

Feb 15 Paid P 6,000 relevant to the sale of delinquent shares. However, no highest bidder.

Feb 18 The corporation decided to acquire its own shares and issued the stock certificate as follows:

24,000 shares defaulting subscribers and the remaining pertains to the issuing corporation.

Instruction: Prepare the journal entries. (Memorandum Entry Method)