TWO METHODS OF ACCOUNTING FOR SHARE CAPITAL TRANSACTIONS X Corporation is authorized to issue share capital of P100,000 divided into 1,000 shares with a par value of P1 P100 per share
JOURNAL ENTRY METHOD Unissued Share Capital Authorized Sh Share Capital
Subscriptions for 100 shares at par value
Subscriptions Receivable Subscribed Share Capital
10,000
Cash
10,000
Collections of subscriptions in full
100,000 100,000
10,000
Subscriptions Receivable Issuance of stock certificates upon full payment of subscriptions
Subscribed Share Capital Unissued Share Capital
Issuance of 50 shares at par for cash
Cash
Issuance of 100 shares at P102 per share
Cash
10,000 10,000 5,000
10,200
Cash
10,200
Issuance of 20 shares in exchange for services of one of the incorporators. FMV of the services is P2,000.
Pre Operating Expenses Unissued Share Capital
Subscribed Share Capital Share Capital Cash
10,000 200
Unissued Share Capital Share Premium Land
Subscriptions Receivable
5,000
Subscriptions Receivable Subscribed Share Capital Share Premium
Issuance of 500 shares in exchange for land. FMV of the land at the time of exhange is P50,000.
Subscritions Receivable Subscribed Share Capital
10,000
Unissued Share Capital Subscriptions for 100 shares at P102 per share
MEMORANDUM ENTRY METHOD The company was authorized to is share capital divided in into 1,000 sh value of P100 per share
Share Capital Subscriptions Receivable Subscribed Share Capital Share Premium Cash
10,000 200 50,000
Unissued Share Capital
Share Capital Share Premium Land
50,000
Share Capital
2,000
Pre Operating Expenses Share Capital
2,000
sue P100,000 res with a par
10,000 10,000 10,000 10,000 10,000 10,000 5,000 5,000 10,200 10,000 200 10,200 10,000 200 50,000 50,000 2,000 2,000
TWO METHODS OF ACCOUNTING FOR SHARE CAPITAL- pro forma entries 2 CLASSES OF STOCKS
TRANSACTIONS AUTHORIZATION
SUBSCRIPTIONS ABOVE PAR - ORDINARY
PREFERENCE
COLLECTION
JOURNAL ENTRY METHOD Unissued Preference Shares Unissued Ordinary Shares Authorized Preference Shares Authorized Ordinary Shares
MEMORANDUM ENTRY METHOD Preference Shares Ordinary authorized to issue….. authoriz
Subscriptions Receivable-Ordinary Subscribed Ordinary Shares Share Premium- Ordinary
Subscriptions Receivable-Ordina Subscribed Ordinary Shar Share Premium- Ordinary
Subscription Receivable-Preference Subscribed Preference Shares Share Premium - Preference
Subscription Receivable-Preferen Subscribed Preference Sh Share Premium - Preferen
Cash
Cash Subsrciption Receivable - Preference Subsrciption Receivable - Ordinary
ISSUANCE OF STOCK CERTIFICATES
Subscribed Ordinary Shares Subscribed Prererence Shares Unissued Ordinary Shares Unissued Preference Shares
Subsrciption Receivable Subsrciption Receivable Subscribed Ordinary Shares Subscribed Preference Shares Ordinary Shares Preference Shares
Shares to issue
y s
ce ares e
Preference Ordinary
TREASURY SHARE TRANSACTIONS- pro-forma entries PURCHASE
SALE ABOVE COST- Ordinary
Treasury Share - Ordinary Treasury Share - Preference Cash Cash Treasury Share- Ordinary Ordinary Share Premium- Treasury
SALE ABOVE COST - Preference
Cash Treasury Share - Preference Preference Share Premium -Treasury
SHARE/STOCK DIVIDENDS DECLARATION - Ordinary
Retained Earnings Shares Distributable- Ordinary Ordinary Share Premium- Share Dividends
DECLARATION - Preference
Retained Earnings Shares Distributable - Preference Preference Share Premium- Share Dividends
ISSUANCE OF SHARE
Shares Distributable - Ordinary Ordinary Shares
DIVIDENDS- Ordinary
ISSUANCE OF SHARE DIVIDENDS - Preference
Shares Distributable - Preference Preference Shares
