Required:

1. prepare journal entries to record the transaction using the memorandum method.

2. Present the shareholders equity in the statement of financial position.

A, B, C, D, and E organized Bump Company at the beginning of the current year with an authorized share capital of P5,000,000 consisting of 50,000 shares of P100 par value. 1. On January 1, subscriptions were taken from for 12,000 shares, from B for 13,000 shares, from C for 8,000 shares, from D for 4,000 shares and from E for 3,000 shares, all at par. 2. A transferred to the corporation in partial payment of the subscription the following assets and liabilities: Accounts receivable 350,000 Notes receivable 70,000 Inventory 680,000 Accounts payable 100,000 3. B transferred the following assets to the corporation in partial payment of the subscription: Land Building 150,000 850,000 4. The remaining incorporators paid 25% of their subscriptions. 5. The corporation received a bill on January 10 in the amount of P50,000 from the legal counsel for organization services rendered. The counsel accepted 500 shares in full payment. 6. A subscription for 1,000 shares at P120 per share was received from F on January 11. F paid P40 per share on his subscription. 7. On January 12, A, B, and C paid the remainder of their subscriptions