Corporation

Problem #13 Shareholders' Equity: Transactions and Statement The shareholders' equity section of L. Generales Corporation at Dec. 31, 2018, follows. Ordinary Shares, P10 par, 100,000 shares authorized, 25,000 P250,000 shares issued, 4,000 shares are in the treasury 325,000 Share Premium 12,000 Share Premium-Treasury 198,000 Retained Earnings P785,000 Total 100,000 Less: Treasury Stock, 4,000 shares at cost P685,000 Total Shareholders' Equity Note: A portion of retained earnings is restricted due to the purchase of treasury stock. The following transactions affecting shareholders' equity occurred during 2019: Jan. 8 Issued 10,000 shares of previously unissued ordinary shares for P26 cash per share. Mar. 12 Sold all of the treasury shares for P27 cash per share. June 30 Declared a 6% share dividend on all outstanding ordinary shares. The market value of the share was P30 per share. July 10 Issued the share dividend declared on June 30. Oct. 7 Acquired 1,100 ordinary shares for the treasury at P28 per share. Dec. 18 Declared a cash dividend of P2.00 per outstanding ordinary share, payable on Jan. 9 to shareholders of record on Dec. 31. 31 Closed the income summary account, with profit of P183,000 to retained earnings. 31 Closed the dividend accounts to retained earnings. Required: 1. Prepare journal entries to record the foregoing transactions. 2. Prepare the statement of changes in shareholders' equity for 2019