Reference no: EM133125682

Question 1 - Atty. Richard Opinion has done a lot in the forming of Farmingstone, Inc. The Articles of incorporation showed that the corporation has an authorized ordinary share capital of P10,000,000 with an equivalent share of 50,000. Farmingstone is to issue 250 shares at par value for the services of the lawyer.

Record the following transactions assuming:

1) The services of Atty. Opinion is valued at P60,000.

2) No known value of the services instead the fair value of ordinary share is determined to be P250.

3) There is no known value for both services rendered and the ordinary share capital Issued.

Question 2 - Monte Alto Development Corporation plans to acquire a parcel of land in exchange for 5,000 preference shares with a par value of P100.

Record the above transactions assuming:

1) The market value of the land was P550,000.

2) The market value of the share on this date is P110.

3) There is no known market value for both the land and share.

Question 3 - Brian Baluya was a subscriber of Global Appliance Corporation for 300 ordinary shares at P150 par value per share. He failed to pay his subscription balance of P27,000 which is equivalent to 180 shares despite lawful calls and notices being sent to him.

The corporation declared all the shares to be delinquent and advertised this to an auction sale. Three (3) bidders were received all in sealed envelopes and signified their intentions to pay the subscription balance of P27,000 plus advertising expenses of P560 but differ on the share that each bidder wanted to acquire:

Melanie Buenzuelan 170 shares

Thelma Ciudadano 178 shares

Gervacio Piator 180 shares

Answer the following questions:

1. How many shares are declared delinquent?

2. Who is the highest bidder in the auction sale?

3. How much cash that subscriber Brian Baluya has paid to the corporation before the subscriptions become delinquent?

4. What is the journal entry to record the delinquency sale of Brian Baluya?

5. After the auction sale and upon issuance of certificates of shares, how many shares shall be issued to Brian Baluya?

6. After the auction sale and upon issuance of certificates of shares, how many shares shall be issued to the highest bidder?

7. How many share certificates shall be issued?