Department of Accountancy

COLLEGE OF ARTS ANND SCIENCES

SAN BEDA UNIVERSITY

FINLPAR Dr. Joffre M. Alajar 1st Sem AY 2018-2019

I. ANDENG AND ANGKOY PARTNERSHIP

Andeng and Angkoy agreed to form a partnership. Andeng will invest cash equal to a third of
Angkoy’s investment with Angkoy investing the following:
COST FAIR MAKET VALUE
Land 1,500,000 3,500,000
Building 5,000,000 2,500,000
Accumulated Depreciation (1,500,000) -

Requirement:
1. Prepare the journal entries to record the investments of the partners.

II. CLARA AND EBA PARTNERSHIP

Clara and Eba agree to form a partnership on May 1. Eba contributed the following items coming
form her sole-proprietor-owned music store:

 Merchandise Inventory – Cost of P120,000; Current fair value of P100,000.

 Equipment – Cost of P500,000; Book value of P350,000; Current fair value 300,000.
 Note payable in purchasing the equipment of P150,000 will be assumed by the partnership
Clara contributed Furniture and Fixtures which was purchased by Clara two years ago for
P500,000 but which current fair market value is only 50% of the cost.
Requirement:
1. Prepare the journal entries to record the investments of the partners.
2. If the partners agree that equity will be 40% for Eba and 60% for Clara how much should
Clara invest?
III. SANTOS AND CLARA PARTNERSHIP
S

III. TOTAL QUALITY UNLIMITED

Par value per share: P20
a. Sold for cash 20,000 shares of stocks at P25 per share.
b. Land with an appraised value of P1,250,000 was received from a shareholder. The
corporation credited a premium for P50,000.
c. The corporate lawyer hired by the corporation billed the firm P120,000 for legal services
rendered. He was given the corresponding shares of stocks.
Requirement:
1. Prepare the journal entries using the memorandum entry methods
2. Give the total number of shares issued, total paid in capital and total additional paid in capital.
IV. BEST SECURITIES CORPORATION
Feb 1 Best securities Corporation was granted by the SEC to issue 1,000,000 shares of
stock at a par value of P10 after it submitted its Articles of Incorporation providing
among other compliance with the minimum pre- incorporation stock requirement.
The articles mentioned five incorporators who subscribed at par. Two were
immediately given stock certificates while the other three gave a 50% down payment.
 Feb 14 The corporation sold for cash 160,000 ordinary shares at P12 per share to various
shareholders.
Mar 14 Gonzalo Enterprises received 320,000 ordinary shares from Best Securities
Corporation in exchange for a land with a cost of P1,750,000 but with a appraised
value which was twice the cost.
Apr 28 Isko Pangilinan, a lawyer, received 4,500 ordinary shares from Best Securities
Corporation for legal services rendered amounting to P50,000.
Requirement:
1. Prepare the journal entries using the memorandum entry method.
2. Prepare the Shareholder’s Equity.

GOOD HEALTH SPA and RESORT, INC.

Sept 1 The firm was authorized to issue 500,000 shares of P50 par value ordinary shares.
Oct 1 Five incorporators subscribed to 180,000 ordinary shares at par as follows:
NAME NO. OF SHARES DOWNPAYMENT
Antonio Lim 30,000 400,000
Andres Castillo 40,000 400,000
Jim Buenaventura 30,000 350,000
Jaime Singson 50,000 600,000
Tony Espiritu 30,000 400,000

Nov 5 The lawyer billed the corporation P150,000 for assisting in the incorporation process and
was given the corresponding shares.
10 Sold 10,000 shares to various shareholders at 120% of its par value.
Dec 1 The incorporators paid another 25% of their subscription balance.
20 Accepted subscriptions from Rubio, Perez, Santos, Sammy and Ong who subscribed to
24,000 shares each at P55 per share. Each Subscriber gave a 25% down payment.
26 Issued to Zobel 55,000 ordinary shares in exchange for land at Redwoods with a market
value of P3,000,000
28 three of the Incorporators, Singson, Espiritu and Lim paid the balance of their
subscriptions and were issued the corresponding stock certificates.
Requirement
1. Prepare the journal entries using the memorandum entry method.
2. Prepare the shareholder’s equity
3. Prepare a statement of financial position.
I. CHA CHA CORPORATION
Ordinary Share Capital, with a par value of 100, 10,000 shares issued and
outstanding 1,000,000
Share premium 50,000
Retained Earning 1,200,000

June 10 Reacquired 500 ordinary shares at P80 per share.

12 50 treasury shares were sold at P75 per share
15 100 treasury shares were sold for P10,000
20 150 treasury shares were sold at P70 per share
25 100 treasury shares were retired
30 An appropriation for treasury stock was recorded
Requirement:
1. Prepare the journal entries for the above transactions.
2. Prepare the Shareholder’s Equity Section as of June 30

II. KOOL CORPORATION

Ordinary Share Capital, with a par value of P50; 18,500 shares issued and
of which 3,500 are in treasury 925,000
Share premium 125,000
Retained Earning 4,500,000
Treasury Shares, at cost ( 210,000 )

Aug 12 1,500 treasury shares were sold at P55 per share

20 Another 1,500 treasury shares were sold at P62 per share
31 The remaining treasury shares where retired
Requirement:
1. Prepare the journal entries for the above transactions.
2. Prepare the Shareholder’s Equity Section as of August 31.

III. BUENO CORPORATION

Redeemable Preference Share Capital, with a par value of P100; 5000
shares issued and outstanding 500,000
Share premium 50,000
Retained Earning 100,000

June 5 Redeemed and retired 500 preference share at P150 per share.
30 Redeemed and retired 500 preference shares at P90 per share.
Requirement:
1. Prepare the journal entries for the above transactions.

IV. NOVA CORPORATION

100,000 Ordinary Share Capital, no par, of which 90,000 were issued 1,100,000
Retained Earning 150,000

July 1 5,000 shares are reacquired and retired at P15 per share.
Dec 31 4,000 shares are reacquired and retired at P8.50 per share.
Requirement:
1. Prepare the journal entries for the above transactions.
2. Prepare the Shareholder’s Equity Section as of December 31, 2015.

V. NINA CORPORATION
Share Capital Stock, par 100 2,000,000
Share premium 100,000
Retained Earning 500,000

Mar 10 2,000 shares were reacquired at P12 per share.

May 15 1,000 of the reacquired shares were sold at P14 per
share June 12 500 of the treasury shares were sold at P11 per share
July 25 Some shareholders donated 1,000 shares
Aug 1 The donated shares were sold at P15 per share
Nov 1 2,000 shares were reacquired in exchange for a merchandise FMV P30,000.
Dec 5 500 of the shares acquired on Nov. 1 were sold at P15 per share.
10 The remaining March 10 treasury were retired
31 Income Summary showed credit balance of P350,000. Part of the retained
earnings equal to the cost of the remaining treasury shares were restricted for
dividend distribution.
Requirement:
1. Prepare the journal entries for the above transactions.
 2. Prepare the Shareholder’s Equity Section as of December 31, 2015.

BRENA CORPORATION
Preference Share, P50 par; 1,000 shares issued of which 20 are in treasury 50,000
Ordinary Share, P10 par; 500 shares issued of which 10 are in treasury 5.000
PIC in excess of par - Preference 1,000
Treasury Share - Preference 1,200
Treasury Share - Ordinary 2,200
Retained Earning 150,000

Prepare the journal entries for the following transactions

Jun 1 Received subscription to 100 preference shares at P51 per share and 20 ordinary shares at
par.
2 Collected 20% of the above subscription.
5 Reacquired 10 preference shares at cost and 50 ordinary shares at P12 per share.
6 Reissued 50 ordinary shares reacquired on June 5 for P15 per share.
8 Retired 6 preference shares reacquired on June 5.
9 Received 5 ordinary shares from two shareholders.
10 Reissued the donated shares at par.
12 Appropriated retained earnings for purchase of treasury based on its balance.
V CORPORATION

2% Preference Shares, P100 par; 1000 shares issued 100,000

Ordinary Shares, P50 par, 1000 shares issued 100,000
Retained Earning 700,000
Treasury Share – Preference 5,000

Prepare the journal entries for the following transactions

Jun 1 Received subscription to 200 preference shares at P101 per share and 400 ordinary shares
at par.
12 Collected 70% of the above subscription.
15 Issued 100 preference shares at P102 and 30 ordinary shares at P51
17 The Board of Directors on its June 17 meeting declared stock dividend for preference and
ordinary (20%) to all shareholders as of June 30. Payable August 15 – FMV 10,000
Jul 1 Issued additional 50 preference share at par and 10 ordinary shares at par.
15 Reacquired 20 ordinary shares at P55.
I. YALE CORPORATION

9% Preference Shares, P100 par; 1000 shares issued 100,000

Ordinary Shares, P10 par, 5000 shares issued 50,000
Retained Earning 200,000

At the year end, P60,000 will be distributed as dividends to preference and ordinary shareholders
whose dividends rights are as follows:
CASE A. Non-cumulative, Non-participating
CASE B. Non-cumulative, Participating
CASE C. Cumulative, Non-participating (2 years dividend in arrears)
CASE D. Cumulative, Participating up to 5%.
Requirement:
Calculate for the amount that will be paid per share and in total on preferred stock and common
stock under each of the above independent assumption.

II. COLE CORPORATION

6% Preference Shares, P100 par; 1000 shares issued 100,000

Ordinary Shares, P50 par, 100 shares issued 5000
Retained Earning 500,000
Dividend Declared 20,000

Requirement:
Calculate for the amount that will be paid per share and in total on preferred stock and common
stock under each of the following independent assumption
CASE A. Non-cumulative, Non-participating
CASE B. Cumulative, Non-participating (2year dividend in arrears)
CASE C. Non-cumulative, Participating
CASE D. Cumulative, Participating up to 7% (1year dividend in arrears)
CASE E. Cumulative, Participating up to 2% (1year dividend in arrears)
CASE F. Cumulative, Participating up to 8% (1year dividend in arrears)
CASE G. Cumulative, Participating up to 6% (1year dividend in arrears)