Reference no: EM132963872

Exercise 1 - The financial position of Pipay Corporation showed the following information as at March 31, 2019, the year that the corporation was authorized to issued 500,000 shares. Assets: Cash Stockholder's Equity P 500,000 Properties Paid In Capital: 1,560,000 P 1,200,000 Subscription Receivable Share Capital, Par P10, 500,000 Subscribed 1,000,000 Paid in Excess of Par 360,000 P2,560,000

Direction

a. How many shares are still unissued?

b. How many shares are still available for sale or for subscription?

c. Record receipt of cash from four incorporators who subscribed at par with a 20% down payment.

d. Record the receipt of properties acquired for shares issued at a premium.

e. Record the additional receipt of cash from the incorporators.

Exercise 2 - Using the information given in Exercise 1, record following additional transactions for 2019. And prepare a revised shareholders' equity.

1) Sold 1,000 shares at P12.00 per share.

2) Received subscriptions from four subscribers for 10,000 shares at a price of P15. A 25% down payment was required.

3) A lawyer who billed the company P100,000 received the corresponding shares for his legal services in helping the incorporators prepare the legal papers.

4) The incorporators paid in full and were given stock certificates.

5) Two subscribers who own half of the shares in transaction 2 paid in full while the other two were given notice to pay within a month.

6) Net income for the year amounted to P300,000.

Use the following format to revise the shareholders' equity: Share Capital Subscribed Paid in Retained Share Capital Excess of Par Earnings 3/31/19 Balances P1,200,000 P1,000,000 P360,000

1) Sale of 1,000 shares

b. Based on the revised shareholders' equity, how many shares are still unissued?

c. How many shares are still available for sale or for subscription?

d. How much is legal capital?

Exercise 3 - The corporation is authorized to issue 100,000 shares with a par value of P50. A list of the incorporators, their subscription and payments are given below:

Incorporators Subscription at par, Down Payment and Second Payment

Celerio 5,500 shares P 65,750 P150,250

Levi 3,000 shares 37,500 1 12,500

Amboy 4,500 shares 56,250 168,750

Inocencio 4,000 shares 53,000 147.000

Madrid 3,500shares 43,750 115,250

Reyes 4,500 shares 56,250 56,250

Direction: From the above data, determine whether the incorporators complied with the 50% paid up capital requirement as provided in the articles of incorporation. Answer following questions:

a) How much is the authorized share capital of the corporation?

b) How many shares are still available for subscription?

c) How many shares were issued?

d) Who among the incorporators should be given due notice to pay?