Suggested Answers - Module 10.1 10.2

10-1
1 C 6 B
2 C 7 B
3 B 8 C
4 B 9 D
5 D 10 C
10-2
A. Cash ( 90,000 sh x P7) 63
Ordinary share capital
B. Cash ( 90,000 sh x P7) 63

Ordinary share capital (90,000 sh x P5)
Share Premium-Ordinary share
C. Cash ( 90,000 sh x P7) 63

10-3
Jun 15 Cash (41,500sh x P25)
Ordinary share capital (41,500sh x P10)
Share premium - ordinary share
Jun 30 Cash (2,500sh x P102)

Preference share capital (2,500sh x P100)
Share premium - preference share
Aug 15 Factory Building

Sept 1 Cash (20,000sh x P10)

Oct 17 Organization cost

Nov 8 Cash (6,000sh x P100)

10-4
Apr 1 " Authorized 500,000 shares with a par value of P60 per share"
1 Subscriptions receivable [(500,000 sh x 25%)xP60]
Subsribed ordinary share capital
2 Cash {[(500,000 sh x 25%)xP60]*25%}

Subscriptions receivable
5 Cash [(75,000 sh x P60)x.75]


10-5
Jan 15 Cash [(2,500 sh x P65)x25%]
Subscriptions receivable [(2,500 sh x P65)x75%]
Subsribed ordinary share capital (2,500 sh x P60)
Share premium-ordinary,(2,500 sh x P5)
Mar 15 Cash [(2,000 sh x P65)x75%]


Ordinary share capital, (2,000sh x P60)
Mar 31 Advances on delinquency sale

Cash
Apr 8 Cash
Subscriptions receivable [(500 sh x P65)x75%]
Advances on delinquency sale

Ordinary share capital, (500sh x P60)
**It should be noted that the 500 shares is issued to Aye and Cee as follows:
AYE - 100 SHARES
CEE - 400 SHARES
10-5
***CORRECTION: Please adjust the balance of CASH to P625,830 and remove the
OFFICE FURNITURE AND ACCUMULATED DEPRECIATION ON OFFICE FURNITURE accounts
and their corresponding balances. This will result to having debit and credit totals of P3,088,0
This adjustment is needed to reflect a cash balance which will be enough for cash refunds in
in excess for the partners' subscriptions.
A. PARTNERSHIP BOOKS
Aug 31 April, Capital
May, Capital
June, Capital
Allowance for doubtful accounts
[(15%x P184,500)-P22,675]
31 Merchandise inventory (P1,968,065 - 1,789,150)

April, Capital
May, Capital
June, Capital
31 April, Capital
May, Capital
June, Capital
Office supplies
31 April, Capital
May, Capital
June, Capital
Prepaid rent
31 Accumulated depreciation [48,000-( 12.5% x 320,000)]

April, Capital
May, Capital
June, Capital
31 April, Capital
May, Capital
June, Capital
Accrued expense payable
COMPOUND ENTRY
Merchandise inventory
Accumulated depreciation
Office supplies
Prepaid rent
Accrued expense payable
April, Capital
May, Capital
June, Capital
April
Capital, unadjusted 1,596,635
Add(deduct) adjustment 54,415
Capital, adjusted 1,651,050
Less: Subscription at par 1,250,000
Cash refund 401,050
31 April, Capital
May, Capital
June, Capital
Cash
To record cash refund to partners.
31 Accounts payable
Accrued expenses payable
Accumulated depreciation - store equipment
April, Capital
May, Capital
June, Capital
Cash
Accounts receivable
Office supplies
Prepaid rent
Store equipment
To close partnership books.
B. CORPORATION BOOKS
Aug 31 "Authorized 150,000 shares of ordinary share capital, par P50"
31 Subscriptions receivable (55,000 sh x P50)

To record subscription for 55,000 shares.
31 Cash
Accounts receivable
Office supplies
Prepaid rent
Store equipment
Accounts payable
Accrued expenses payable
To record transfer of partnership net assets in payment of
April, May and June's subscriptions
31 Cash (10,000 shares x P50)

To record collection from January and July
31 Subsribed ordinary share capital
Ordinary share capital, (55,000sh x P50)
To record issuance of shares.
P6-5C
Preference
1 A. Authorized Shares 200,000
B. Subscribed Shares 12,000
C. Authorized shares 200,000

Less: Unissued shares 69,000
Issued Shares 131,000
2 A. Authorized share capital 10,000,000

Less: Unissued share capital 3,450,000
Issued Share Capital 6,550,000
B. Subscribed Share Capital 600,000
C. Subscribed Share Capital 600,000

Less: Subscriptions receivable 380,000
Net subscribed share capital 220,000
D. Issued share capital 6,550,000

Add: Subscribed share capital 600,000
Legal Capital 7,150,000
E. Issued Share Capital 6,550,000

Subscribed share capital 600,000
Share Premium
Treasury shares (1,360,000)
Contributed capital 5,790,000
630,000
630,000
630,000
450,000
180,000
630,000
630,000
1,037,500
415,000
622,500
255,000
250,000
5,000
240,000
200,000
40,000
200,000
200,000
40,000
30,000
10,000
600,000
600,000
7,500,000
7,500,000
1,875,000
1,875,000
3,375,000
3,375,000
4,500,000
4,500,000
40,625
121,875
150,000
12,500
97,500
97,500
120,000
120,000
1,800
1,800
26,175
24,375
1,800
30,000
30,000
and remove the

CE FURNITURE accounts
and credit totals of P3,088,050.
enough for cash refunds in
2,500
1,500
1,000
5,000
178,915
89,458
53,675
35,783
4,043
2,426
1,617
8,085
25,000
15,000
10,000
50,000
8,000
4,000
2,400
1,600
7,500
4,500
3,000
15,000
178,915
8,000
5,000
8,085
50,000
15,000
54,415
32,649
21,766
May June
752,810 414,605
32,649 21,766
785,459 436,371
625,000 375,000
160,459 61,371
401,050
160,459
61,371
622,880
253,325
15,000
27,675
40,000
1,250,000
625,000
375,000
2,950
184,500
1,968,065
35,485
75,000
320,000
2,750,000
2,750,000
2,950
184,500
1,968,065
35,485
75,000
280,000
253,325
15,000
27,675
2,250,000
500,000
500,000
2,750,000
2,750,000
Ordinary Preference share, authorized, P50 par 10,000,000.00

200,000 Unissued preference share 3,450,000.00
Issued preference share 6,550,000.00
22,000 Ordinary share, authorized, P20 par 4,000,000.00
Unissued ordinary share 2,180,000.00
200,000 Subscription receivable, preference share 380,000.00
109,000 Subscrption receivable, ordinary share 360,000.00
91,000 Subscribed preference share 600,000.00
Subscribed ordinary share 440,000.00
4,000,000 Treasury share, preference, at cost 1,360,000.00
2,180,000 Share premium ordinary 1,700,000.00
1,820,000 Accumulated profits and loses 2,570,000.00
440,000
440,000
360,000
80,000
1,820,000
440,000
2,260,000
1,820,000
440,000
1,700,000
3,960,000
SITAW CORP
Dec 5 Treasury shares-ordinary ( 5,000 sh x P15) 75,000
Cash
10 Cash ( 2,000 sh x P18) 36,000

Treasury shares-ordinary ( 2,000 sh x P15)
Share premium - treasury shares
17 Cash ( 1,000 sh x P14) 14,000

Share premium - treasury shares 1,000
19 Ordinary share capital ( 1,000 sh x P10) 10,000

Share premium - orig issuance [P30,000 x (1,000/15,000 sh)] 2,000
19 Accumulated profits (1,000 sh x P15) 15,000

Accumulated profits - appropriated
SUMMATIVE ACTIVITY
1 1a "Authorized 50,000 shares of preference share capital, par P100, and 200,000 shares"
of ordinary share capital, par, P50."
1b Cash (30,000 sh x P140) 4,200,000

Share premium-preference
1c Cash (100,000 sh x P55) 5,500,000

Share premium-ordinary
1d Treasury shares - preference (10,000 sh x P120) 1,200,000

Cash
Preference share capital (10,000sh x P100) 1,000,000

Share premium - orig issuance [P1,200,000 x 10/30 sh)] 200,000
Treasury shares - preference (10,000 sh x P120)
1e Treasury shares - ordinary (15,000 sh x P52) 780,000

Cash
1f Cash ( 10,000 sh x P60) 600,000

1g "Received from shareholders as donation 20,000 shares of ordinary share capital with
P50 par value."
Cash ( 10,000 sh x P65) 650,000

Donated capital
1h Income summary 3,000,000

Retained earnings
1i Retained earnings 260,000

Retained earnings - appropriated
2 Bawang Corporation
Partial Statement of Financial Position
As of December 31, 2014
SHAREHOLDERS' EQUITY
Share Capital
Preference share capital, P100 par value, 50,000 shares
authorized, 20,000 shares issued and outstanding 2,000,000
Ordinary share capital, P50 par value, 200,000 shares
authorized, 100,000 shares issued of which 5,000 shares
in treasury and 10,000 shares donated 5,000,000
Reserves
Share premium-preference 1,200,000
Share premium-ordinary 300,000
Share premium-treasury 80,000
Donated capital 650,000
Appropriation reserve for treasury 260,000
Retained Earnings
Total
Less: Treasury shares, ordinary, 5,000 shares at cost
Total shareholders' equity
Preference Ordinary
3 a. How many shares issued? 20,000 shares 100,000
b. How many shares outstanding? 20,000 shares 85,000
SUMMATIVE 10.2 ** Assume that subscriptions receivables are collectible currently**

1 1 Cash (40,000 sh x P60) 2,400,000
2 Cash (10,000 sh x P120) 1,200,000
Share premium-preference
3 Subscriptions receivable - preference 1,000,000

Subscribed preference share capital (10,000sh x P100)
4 Cash 400,000
Subscriptions receivable - preference
5 Organization cost 100,000

6 Building 1,300,000
7 Subscriptions receivable - ordinary (15,000sh x P55) 825,000

Subscribed ordinary share capital (15,000sh x P50)
8 Cash 330,000
Subscriptions receivable - ordinary
9 Cash 600,000
Subscriptions receivable - preference
9 Subscribed preference share capital 1,000,000

10 Treasury shares - ordinary (5,000 sh x P40) 200,000

Cash
11 Cash ( 2,800 sh x P47) 131,600

12 Cash ( 1,250 sh x P35) 43,750

13 Ordinary share capital ( 450 sh x P50) 22,500

Treasury shares-ordinary ( 450 sh x P40)
14 Retained earnings (500 sh x P40) 20,000

Retained earnings - appropriated
15 Income summary 2,000,000
Retained earnings
2 Luya Corporation
Partial Statement of Financial Position
As of December 31, 2020
SHAREHOLDERS' EQUITY
Share Capital
Preference share capital, P100 par value, 30,000 shares
authorized, 28,500 shares issued and outstanding 2,850,000
Ordinary share capital, P50 par value, 100,000 shares
authorized, 84,550 shares issued of which 500 shares
in treasury 4,227,500
Subscribed ordinary share capital 750,000
Reserves
Share premium-preference 260,000
Share premium-ordinary 775,000
Share premium-treasury 17,850
Appropriation reserve for treasury 20,000
Retained Earnings
Total
Less: Treasury shares, ordinary, 500 shares at cost
Total shareholders' equity
Preference Ordinary
3 a. How many shares issued? 28,500 shares 84,550
b. How many shares outstanding? 28,500 shares 84,050
YELLOW CORP
2019
Sept 12 Accumulated profits 901,000
Property dividend payable (8,500 sh x P106)
Dec 31 Accumulated profits 119,000

Property dividend payable (8,500 sh x (P120-106)
2020
Feb 20 Property dividend payable (8,500 sh x (P118 - 120) 17,000
Accumulated profits
Property dividend payable (8,500 sh x P118) 1,003,000

Investment in equity securities - Grapes (8,500sh x P95)
Gain on distribution on property dividend
INDIGO
Case A
Share dividend payable (40,500 sh x P10)
Declared shares 40,500

Divided by: Total outstanding shares
(P1,200,000/P10) + 40,000 shares 160,000
Share dividend percentage 25%
*based on the %, the issued dividends are considered to be "large". Thus, the
amount charged to the accumulated profits is up to the extent only of PAR
Dec 31 Share dividend payable 405,000

Case B
Dec 1 Accumulated profits (40,500 sh x P20) 810,000
Share dividend payable (40,500 sh x P5)
Share premium - ordinary shares
Declared shares 40,500

Divided by: Total outstanding shares
(P1,200,000/P5) + 40,000 shares 280,000
Share dividend percentage 14%
*based on the %, the issued dividends are considered to be "small". Thus, the
amount charged to the accumulated profits is up to the extent of FAIR VALUE
Dec 31 Share dividend payable 202,500

VIOLET
Interest expense
31 Accumulated profits ( 315,000 - 280,000) 35,000

Gain on distribution on property dividend
31 Accumulated profits (1,000sh x (P18-5) 13,000

share premium
75,000
30,000
6,000
15,000
15,000
15,000
d 200,000 shares"
3,000,000
1,200,000
5,000,000
500,000
1,200,000
1,200,000
780,000
520,000
80,000
share capital with
650,000
3,000,000
260,000
7,000,000
2,490,000
2,740,000
12,230,000
260,000
11,970,000
Ordinary
shares
shares
Preference share cap Ordinary Share cap

2,000,000 750,000 22,500 1,250,000
400,000 1,000,000 2,000,000
100,000 1,000,000
1,000,000
1,000,000 2,850,000 4,227,500
200,000
1,000,000
Share premium - preference Share premium - ordinary
60,000 300,000
400,000 200,000 400,000
75,000
260,000 775,000
100,000
1,000,000
300,000
Subscribed pref. share cap Subscribed ordin share cap
1,000,000 1,000,000
750,000 750,000
75,000
330,000
Retained earnings Treasury shares-ordin
20,000 1,380,000 200,000 112,000
600,000 2,000,000 50,000
3,360,000 18,000
1,000,000 Appropriation for TS 20,000

20,000
Share prem - TS
200,000 6,250 19,600
4,500
112,000 17,850
19,600
50,000
18,000
4,500
20,000
2,000,000
7,827,500
1,072,850
3,360,000
12,260,350
20,000
12,240,350
Ordinary
shares
shares
901,000
119,000
17,000
807,500
195,500
405,000
405,000
202,500
607,500
Thus, the
202,500
50,000
35,000
13,000

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10-1

B. Cash ( 90,000 sh x P7) 63

C. Cash ( 90,000 sh x P7) 63

Jun 30 Cash (2,500sh x P102)

Aug 15 Factory Building

Sept 1 Cash (20,000sh x P10)

Oct 17 Organization cost

Nov 8 Cash (6,000sh x P100)

2 Cash {[(500,000 sh x 25%)xP60]*25%}

5 Cash [(75,000 sh x P60)x.75]

Subsribed ordinary share capital

Mar 15 Cash [(2,000 sh x P65)x75%]

Subsribed ordinary share capital

Mar 31 Advances on delinquency sale

Subsribed ordinary share capital

31 Merchandise inventory (P1,968,065 - 1,789,150)

31 Accumulated depreciation [48,000-( 12.5% x 320,000)]

31 Subscriptions receivable (55,000 sh x P50)

31 Cash (10,000 shares x P50)

B. Subscribed Shares 12,000

C. Authorized shares 200,000

2 A. Authorized share capital 10,000,000

B. Subscribed Share Capital 600,000

C. Subscribed Share Capital 600,000

D. Issued share capital 6,550,000

E. Issued Share Capital 6,550,000

and remove the

Ordinary Preference share, authorized, P50 par 10,000,000.00

10 Cash ( 2,000 sh x P18) 36,000

17 Cash ( 1,000 sh x P14) 14,000

19 Ordinary share capital ( 1,000 sh x P10) 10,000

19 Accumulated profits (1,000 sh x P15) 15,000

1b Cash (30,000 sh x P140) 4,200,000

1c Cash (100,000 sh x P55) 5,500,000

1d Treasury shares - preference (10,000 sh x P120) 1,200,000

Preference share capital (10,000sh x P100) 1,000,000

1e Treasury shares - ordinary (15,000 sh x P52) 780,000

1f Cash ( 10,000 sh x P60) 600,000

Cash ( 10,000 sh x P65) 650,000

1h Income summary 3,000,000

1i Retained earnings 260,000

SUMMATIVE 10.2 ** Assume that subscriptions receivables are collectible currently**

3 Subscriptions receivable - preference 1,000,000

5 Organization cost 100,000

7 Subscriptions receivable - ordinary (15,000sh x P55) 825,000

9 Subscribed preference share capital 1,000,000

10 Treasury shares - ordinary (5,000 sh x P40) 200,000

11 Cash ( 2,800 sh x P47) 131,600

12 Cash ( 1,250 sh x P35) 43,750

13 Ordinary share capital ( 450 sh x P50) 22,500

14 Retained earnings (500 sh x P40) 20,000

Dec 31 Accumulated profits 119,000

Property dividend payable (8,500 sh x P118) 1,003,000

Declared shares 40,500

Dec 31 Share dividend payable 405,000

Declared shares 40,500

Dec 31 Share dividend payable 202,500

31 Accumulated profits ( 315,000 - 280,000) 35,000

31 Accumulated profits (1,000sh x (P18-5) 13,000

SUMMATIVE 10.2 Assume that subscriptions receivables are collectible currently