Reference no: EM132756906

Question - Memorandum method vs Journal Entry method

1. Entity A was incorporated at the start of the current period. The following were Entity A's share capital transactions during the year:

a. The SEC approved Entity A's authorized capitalization of P3,000,0000 divided into 100,000 shares with par value of P30 per share.

b. Twenty-Five percent (25%) of the authorized capitalization was subscribed at par value and twenty-five percent (25%) of the subciption price was paid on subcription date.

c. Received full paymet for 10,000 subscribed shares and issued the related share certifictes.

d. Received cash subscription for 15,000 additional shares at a subcription price of P40 per share.

e. Received subscription for 10,000 additional shares at a subcription price of P50 per share.

f. collected the full payment on the subscription in e' above and issued the related share certificate.

Requirements -

a. Provide the journal entries under (1) memorandum method and (2) Journal Entry Method.

b. Prepare the shareholder's equity of Entity A as of the end of the period.