Reference no: EM132937540
Question - C. Tan Corporation was authorized to issue 1 million shares of 10%, P80 par value, cumulative and participating preference shares and 2.5 million shares of P50 par value ordinary shares. The following transactions occurred during 2016:
Jan. 28? 150,000 ordinary shares were sold to a group of investors at P60 per share.
Feb. 5 ?Paid PhP30,000 cash to the company's founders for organization activities.
Feb. 12 ?50,000 preference shares were issued in exchange for a building valued at P2,500,000 and merchandise inventory valued at P1,650,000.
Mar. 9 ?25,000 ordinary shares were issued to a law firm in exchange for legal services pertaining to the incorporation. The stock is selling at P55 per share. The parties agreed that this represented the value of the lawyers' services.
May 3 ?50,000 ordinary shares were issued in exchange for land. The cost of the land is P2,000,000, the asking price is PhP3,000,000, the fair market value is P2,700,000.
Jul. 22 ?Additional 40,000 preference shares were issued at P95 per share.
Sept. 10 ?25,000 ordinary shares were repurchased at P60 per share. The shares are to be held in treasury.
Oct. 6 ?Additional 35,000 preference shares were sold at P100 per share.
Nov. 15 ?The firm sold 5,000 shares of the stock held in treasury at a price of P70 per share.
Nov. 29 ?The firm sold another 7,000 shares of the stock held in treasury at a price of P45 per share.
Required -
a) Prepare the journal entries to record these transactions.
b) Assuming that the profit for the year amounted to PhP2,000,000, prepare the shareholders' equity section of the statement of financial position as at Dec. 31, 2016.
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