Good Harvest Corporation was incorporated on January 1, 2021, with authorized share capital of 300,000 shares at

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Question:

Good Harvest Corporation was incorporated on January 1, 2021, with authorized share capital of 300,000 shares at P20 par value. Record the transactions completed during the months of January and February using :

(1) The memorandum entry method

(2) The journal entry method

a. The incorporators subscribed to twenty five percent of the authorized share capital and paid 25% of the subscription price

b. Good Harvest issued 10,000 shares for cash at P22 per share

c. The corporation received subscription for 5,000 shares at P24 per share. Thirty percent of the subscription was collected and the balance is due on March 31, 2021.

d. The incorporators in (a) paid the balance due on their subscriptions, and the share certificates were accordingly issued.

P2:

Use the same information given in Problem 1. Present the shareholders' equity section of the statement of financial position of Good Harvest Corporation on February 28, 2021 using:

(1) The memorandum entry method

(2) The journal entry method

P3:

Goodwill Corporation was authorized to issue 60,000, P100 par value ordinary share capital on November 3, 2021. The following are share capital transactions completed during the month of November:

Nov. 4 Issued 9,000 shares to David at par

Nov. 7 Received subscription from Ramos for 5,500 shares at P120 per share

Nov. 11 Received subscription from Vargas for 6,000 shares at P125 per share. 25% down payment was collected.

Nov. 15 Collected in full the subscription of Ramos and share certificate was correspondingly issued.

Nov. 21 Issued 1,000 shares in exchange for machinery with equivalent cash price of P125,000

Nov. 22 Received full payment from Vargas

Nov. 24 Received a statement of account for the services rendered by Delgado, for drafting and filing the Articles of Incorporation and the corporate by-laws. The bill is for P60,000 which is settled by issuing 500 ordinary shares

Nov. 30 The remaining shares were subscribed by Bautista at P130 per share. The corporation collected 40% of the subscription price, the balance is payable on or before January 31, 2022

Required:

(a) Journalize the foregoing transactions using the memorandum entry method

(b) Prepare the contributed capital section of the Statement of Financial Position at December 31, 2021, assuming that there were no other transactions that occurred during December relating to share capital

P4:

The Fernandez Corporation was incorporated on September 1, 2021 and was authorized to issue share capital as follows: 200,000 shares of no par ordinary shares 5,000 shares of 6% preference share at a par value of P200

The following share capital transactions took place in the months of September and October 2021.

a. On September 14, subscriptions were received for the authorized ordinary shares at P30 per share on the following terms: 25% down in cash at the date of subscription, the balance is payable in three equal installments due on October 15, November 15 and December 15

b. On September 18, all of the preference shares are sold for cash at P220 per share. Transactions costs of P5,000 were incurred and paid

c. On October 15, the corporation collected the first installment of the subscription in (a).

Required:

a. Journal entry to record the above transactions

b. Shareholders' equity section of the statement of financial position as of October 31, 2021

P5:

ABC Corporation which issues P15 par value ordinary shares, completed the following transactions during 2021.

1. Received subscription from Martinez for 25,000 shares at P18 per share

2. Received from Martinez 45% of the subscription price.

3. On due date, Martinez failed to pay the balance of the subscription. The shares were subsequently declared delinquent and were advertised for sale at a public auction.

4. Paid P4,000 for advertising the sale of the delinquent shares

5. Received bids from the following:

Recto 10,000 shares Zubiri 9,000 shares Pichay 12,000 shares

6.The amount due from the highest bidder, plus 12% interest for two months on the balance of the subscription price, was collected. Shares were accordingly issued.

Required:

a) Prepare journal entries for the foregoing

(b) Who is the highest bidder? Determine the share allotment between the highest bidder and Martinez.

P6:

The following transactions relate to the shareholders' equity of Telecom Corporation for 2021, its initial year of operations and existence:

a. On January 7, the articles of incorporation were filed with the Securities and Exchange Commission (SEC). The SEC authorized the issuance of 10,000 shares of P50 par value preference share capital and 200,000 shares of P10 par ordinary share capital

b. On January 28, forty thousand ordinary shares were issued at P15 per share.

c. On February 14, one hundred twenty thousand ordinary shares were issued in exchange for land and building that have an appraised value of P700,000 and P1,100,000, respectively. On this date, the shares trade at P15 per share on the over the counter market.

d. On February 24, the company issued to the lawyers 2,000 ordinary shares for legal services in connection with the incorporation. The fair value of the shares on this date is P16.

e. On September 12, the company received subscriptions for 10,000 preference shares at P53 per share. A 40% down payment accompanied the subscriptions. The balance is due on October 1.

f. October 1, the final payment on 10,000 shares subscribed in (e) was received.

Required:

(a) Using the journal entry method, record the foregoing transactions

(b) Assume that there were no other share capital transactions until December 31. Determine the following as of December 31:

(1) Total legal capital

(2) Total share premium

(3) Total contributed capital

P7:

The partnership of Daryl and Emily had the following statement of financial position accounts as of December 31, 2021:

Cash P240,000 Accounts Receivable 200,000 Inventory 280,000 Equipment 160,000 Accumulated Depreciation (16,000) Total Assets P864,000 Accounts Payable P344,000 Daryl, capital 280,000 Emily, capital 240,000 Total Liabilities and Partners' Equity P864,000

The partners agreed to incorporate the business, register the same as Cookie Bar Corporation and have the new corporation absorb all the assets and assume the liabilities of the partnership, after giving effect to the following adjustments:

a. An allowance for uncollectible accounts of P20,000 will be provided

b. The merchandise inventory will be adjusted to its fair value of P320,000

c. The accumulated depreciation shall be increased by P6,000 to bring the carrying value of the equipment to its fair value

Shares were issued, at par, equal in amount to the fair value of the net assets transferred to the corporation. Three other incorporators contributed total cash of P300,000 in exchange for the corporation's share capital. The shares were issued at par value.

Required:

(a) Prepare the entries in the books of the partnership of Daryl and Emily as a result of the foregoing

(b) Prepare the entries in the books of the Cookie Bar Corporation