Reference no: EM132729987

B. Sorima Corporation began operations on Jan. 1, 2018. The following transactions relating to shareholders' equity occurred in the first two years of the corporation's operations:

2018

Jan 1 Authorized the issuance of 2 million shares of P5 par value ordinary shares and 100,000 shares of P100 par value, 10% cumulative preference shares.

Jan 2 Issued 200,000 shares of ordinary shares for P12 cash per share.

Jan 3 Issued 100,000 shares of ordinary shares in exchange for a building valued at P820,000 and merchandise inventory valued at P380,000.

Jan 4 Paid P10,000 cash to the corporation's founders for organization activities.

Jan 5 Issued 12,000 shares of preference shares for P110 cash per share.

2019

June 4 Issued 100,000 shares of ordinary shares for P15 cash per share.

Required:

Problem 1: Prepare the journal entries to record these transactions.

Problem 2: Prepare the share capital section of the shareholders' equity as at Dec. 31, 2018 and Dec. 31, 2019.

Problem 3: Prepare the table showing dividend allocations and dividends per share for 2018 and 2019 assuming the corporation declared the following cash dividends: 2018, P50,000 and 2019, P300,000.

Problem 4: Prepare the Jan. 2, 2018 journal entry for the issuance of 200,000 ordinary shares for P12 cash per share assuming:

a. Ordinary Shares is no-par without a stated value.

b. Ordinary Shares is no-par with a stated value of P10 per share.