Reference no: EM132910285
Assume the following share capital transactions of Diamond Company (December 2018 transactions):
1. Authorization of share capital to be issued:
a. Ordinary shares, 10,000 shares at par P100
b. 10% preference shares, 10,000 shares at par P50
2. Subscription received:
a. Ordinary shares, 6,000 shares at P120; cash consideration received P600,000; 75% subscribers are fully paid.
b. 10% preference shares, 5,000 shares at P60; cash consideration received P260,000;
80% subscribers are fully paid
3. Net income for the period to be closed to the accumulated profits is P1,000,000
4. Reacquisition of shares:
a. Ordinary shares, 500 shares at cost of P80 per share
b. 10% preference shares, 1,000 shares at cost of P60 per share
5. Sale of 300 ordinary treasury shares at P90 per share
6. Direct retirement of 800 preference shares acquired at cost of P55 per share.
Required:
Problem 1. Entries for the above transactions (memorandum method)
Problem 2. Amounts and number of issued and outstanding shares
Problem 3. Shareholder's equity of Diamond Company
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