Reference no: EM133076369

Problem 1 - Shares Issuance for Cash

Roa Corporation's articles authorized the issuance of 100,000 ordinary shares. Roa sold the following ordinary shares during 2019:

Feb. 12 Sold 1,000 shares for P100,000

July 10 Sold 5,000 shares for P630,000

Nov. 5 Sold 7,500 shares for P1,050,000

Required - Prepare journal entries to record each issuance, assuming that:

The ordinary shares has a P100 par value.

The ordinary shares has a P10 stated value.

The ordinary shares has no-par or stated value.

Problem 2 - Issuance of Ordinary Shares

The Delgado Software Corporation is authorized to issue 80,000 ordinary shares. During the current year, the corporation issued 25,000 shares.

Required - Prepare the required entry to record the issuance of ordinary shares under each of the following assumptions:

The shares have a P5 par value and were sold for P20 per share.

The shares are no-par but have a stated value of P10. The total issue price was P850,000.

The shares are no-par and have no stated value. They were issued at P25 per share.

Problem 3 - Treasury Stock Transaction

On January 1, 2019, Gulane Corporation had the following balances in its shareholders' equity accounts:

Ordinary Shares, P5 par P 500,000

Share Premium - Ordinary 2,000,000

Retained Earnings 7,000,000

On March 28, the corporation purchased 10,000 shares as treasury stock at P15 per share. On April 10, it sold 4,000 of the treasury shares at P14 per share. On July 5, it sold 2,000 shares at P16 per share.

Required - 1. Calculate the number of shares issued and the number of shares outstanding on Jan. 1, Mar. 1, June 30, and Sept. 30, 2019 assuming no other equity transactions occurred.

2. Prepare the journal entries for the treasury stock transactions.

Problem 4 - Small Share Dividends

The E. Delos Santos, Inc. board of directors voted on June 1, 2019, to declare a 10% shares distributable on July 1, to shareholders of record as of June 15, 2019. On June 1, E. Delos Santos has 500,000 shares of P10 par ordinary shares authorized, 55,000 shares are issued and 5,000 shares are held as treasury stock. E. Delos Santos stock is selling for P45 per share on June 1, 2019.

Required - Prepare the entries needed on the declaration, record and payment dates.