Problem $1.$After formation on August $1,2024,$ the ledger accounts of the Cakes Corporation have the following balances:Accrued expensesP $50,000$Accounts payable$400,000$Accounts receivableAllowance for uncollectible accounts$220,00020,000$BuildingCash$1,000,000160,000$Ordinary shares, P$250$ par, $50,000$ shares authorized$1,513,000$Subscribed ordinary shares$80,000$Furniture and fixtures$250,000$Merchandise inventory$1,000,000$Notes payable $-200$ days$250,000$Organization expense$30,000$Share premium $-$ ordinaryShare premium $-$ preference$60,00030,000$Preference shares, $10\%$ noncumulative and nonparticipatingP$500$ par, $5,000$ shares authorized$250,000$Subscribed preference shares, $10\%,$ P$500$ par$100,000$Subscriptions receivable $-$ ordinary$41,000$Subscriptions receivable $-$ preference$52,000$Required:$1.$ Compute the followinga. Outstanding ordinary sharesb. Number of ordinary shares subscribedc. Outstanding preference sharesd. Number of preference shares subscribede. Legal capitalf. Contributed capital$2.$ Prepare a classified statement of financial position for Cakes Corporation immediately after formation.Problem $2.$The accounts below appeared in the December $31,2025$ trial balance of the Raindrop Corporation:Ordinary shares, P$15$ par, $20,000$ shares authorized Subscriptions receivableSubscribed ordinary sharesRetained earningsShare premiumTreasury shares, $1,000$ shares at costP $270,00017,00027,000200,00095,00025,000$Determine the following:$1.$ Total unissued ordinary shares$2.$ Total issued ordinary shares$3.$ Ordinary shares subscribed$4.$ Total shareholders' equity$5.$ Contributed capital$|6.$ Legal capitalProblem $3.$Ocean Company was organized at the beginning of the current year and was authorized to issue share capital of $100,000$ shares of P$50$ par value. The following transactions occurred during the year in connection with the share capital:a$.$ Incorporators subscribed $25\%$ of the authorized share capital at par value.b$.$ Incorporators paid $25\%$ of their subscriptions.& Eul wyet was re of vet o$5$ os shares e paly sanct or $10,00$ shares. The market value of the share at$.$e$.$ Cash subscription to $5,000$ shares at P$60$ per share was received.f$.$ Issued $2,000$ shares to the legal counsel in payment for his P$100,000$ bill for organization services$\mathrm{.}8.$ Net income for the current year was P$2,000,000.$Required:$1.$ Prepare journal entries using the memorandum entry method$\mathrm{.}2.$ Prepare the statement of changes in shareholders' equity$\mathrm{.}3.$ Present the shareholders' equity section in the statement of financial position in good form.