Reference no: EM132974361
Question - Global Incorporated is a public enterprise whose shares are traded in the over-the-counter market. At December 31, 2017 Global had 6,000,000 authorized shares of P 10 par value ordinary share, of which 2,000,000 shares were issued and outstanding. The share holder's equity section at December 31, 2017 had the following account balances:
Ordinary shares P 20,000,000
Share premium 7,500,000
Retained earnings 6,470,000
Transactions during 2018 and other information relating to the stockholder's equity account were as follows:
a. On January 5, 2018, Global issued at P 54 per share, 100,000 shares at P 50 par value 9% cumulative preference share. Global had 600,000 authorized shares of preference share.
b. On February 2, 2018, Global reacquired 20,000 ordinary shares for P 16 per share. (Use cost method)
c. On April 27, 2018, Global issued 500,000 shares ( previously unissued ) of P 10 par value ordinary share to the public at P 17 per share.
d. On May 22, 2018, Global received subscriptions to 20,000 ordinary shares from Jude Dy at P 17 per share with a 40% down payment.
e. On May 22, 2018, Global issued 2,000 preference shares for P55 per share.
f. On May 30, 2018, Global received 5,000 shares of Global P 10 par value ordinary shares as a donation from a shareholder. On this date the shares were selling at P 20 per share.
g. On June 19, 2018, Global issued 15,000 preference shares in exchange for a parcel of land. The land has a fair market value of P 1,200,000 and the preference shares are currently trading at P 40 per share.
h. On July 9, 2018, Global sold 15,000 shares of treasury stock acquired on February 2, for P 21 per share.
i. On July 15, 2018, Global received subscriptions to 50,000 ordinary shares at P 22 per share with 60% down payment.
j. On August 11, 2018, Global sold the donated shares for P 130,000.
k. On August 23, 2018, Global sold 1⁄2 of the remaining treasury shares for P 10 per share.
l. After his payment on May 22, Jude made no further payment despite several calls made by the corporation. Thus, on August 30, 2018 Global declared the shares as delinquent and auctioned to the public.
m. On September 17, 2018, auction expense amounting to P 50,000 were paid by Global Corporation. The following were the bidders of the said auction:
Colm Wilkinson 16,000 shares
Michael Ball 15,100 shares
Anthony Warlow 19,000 shares
Philip Quarks 14,400 shares
n. On September 19, 2018, Global collected the amount due from the highest bidder and issued the share certificates
o. On October 13, 2018, Global issued 50,000 ordinary shares and 20,000 preference shares for P 2,625,000. At this date, the ordinary shares were selling for P 22 and the convertible preference shares were selling for P 70 per share.
p. On November 16, 2018, Global retired 2/5 of the remaining treasury shares.
q. On December 5, 2018, Global issued 60,000 ordinary shares in exchange for an outstanding loan in the amount of P 1,000,000.
r. On December 31, 2018, the income summary account had a P 4,500,000 credit balance before final closing to retained earnings.
Requirements -
1. Prepare the necessary journal entry. Use 2-column journal.
2. Prepare Shareholder's Equity.
3. Compute the balances of the following at December 31, 2018:
a. Legal capital
b. Total share premium
c. Total contributed capital
d. Unappropriated retained earnings
e. Total shareholder's equity
f. Number of preference shares issued
g. Number of preference shares outstanding
h. Number of ordinary shares
i. Number of ordinary shares outstanding