Reference no: EM132926094
Problem 1 - Sunrise Corporation, a food company, was established on January 2, 2018. It is authorized to issue 100,000 shares of 6%, P50 par value preference shares, and 600,000 shares of no par value ordinary shares with a stated value of P5 per share. It made the following share transactions during the year:
February 12 Issued 120,000 ordinary shares for cash at P6 per share.
March 2 Issued 30,000 preference shares at par for cash.
March 24 Issued 100,000 ordinary shares for a piece of land as future building site. The asking price for the land was P700,000. The fair value was P600,000.
April 18 Issued 200,000 ordinary shares for cash at P7 per share.
November 15 Issued 10,000 preference shares for cash at P54 per share.
Required -
A. Journalize the foregoing transactions.
B. Prepare the share capital section of the stockholders' equity as of December 31, 2018.
Problem 2 - GHI Corporation, a distributor of various beauty products, was authorized to issue 10,000 6%, P100 par prefrence shares and 40,000 P50 par ordinary shares. During its first year of operations, it engaged in the following selected transactions:
January 5 Issued 10,000 ordinary shares at par for cash.
January 15 Issued 2,500 preference shares at par for cash.
February 10 Paid P6,000 cash for costs incurred in forming and organizing a corporation.
February 20 Received subscription to 20,000 ordinary shares at P60 per share together with the 40% downpayment.
March 25 Received subscription to 4,000 preference shares at P105 per share together with the 40% downpayment.
August 20 Received 20% of the subscription price on Feb 20 transaction.
September 25 Received the balance of the subscription price in March 25 transaction and issued the stock certificate.
October 10 Issued 4,000 ordinary shares for equipment with a fair value of P240,000.
December 31 Closed the P300,000 credit balance of the income summary to retained earnings.
Required -
A. Prepare journal entries to record the above transactions.
B. Prepare the stockholder's equity section as of December 31, 2018.