Exercise 1

Cebu Centennial Hotel was organized on Aug. 5, 2020 with an authorized share capital consisting of 100,000 shares and 10%
preference shares of 50,000 with par value of P100 and P30 respectively. The incorporators are as follows:

Shares subscribed Payment Received Par value

Incorporators Preference Ordinary Preference Ordinary PreferenceOrdinary
David 2,000 4,500 60,000 450,000 30 100
Posing 2,500 4,600 75,000 460,000
Leon 2,300 4,300 69,000 430,000
Ogatis 1,800 4,400 54,000 440,000
Pabriga 2,600 4,800 78,000 480,000
Calumpiano 2,800 4,400 84,000 440,000
14,000 27,000 420,000 2,700,000

Exercise 1
Aug. 5 Issued 200 ordinary shares at P100 par value for incorporation expense worth P25,000
Aug. 10 The above incorporators have paid in full their subscription balances and were issued by share certificates
Aug. 15 Cabreros subscribed to 1,000 ordinary shares and 200 preference share at P105 and P35 respectively
and made 20% downpayment for each class of share.
Aug. 20 Tumulak, owner of the adjacent lot to the hotel, subscribed to 3,000 ordinary shares at P105 in
exchange of lot to be used as parking space. Share certificate was issued.
Aug. 28 Limbago subscribed to 2,000 preference share of P32. Paid in full her subscription balance and issued share ce
Aug. 29 Cabreros paid her subscription balance for ordinary shares and was issued a share certificate.

REQUIRED:
1. Prepare journal entries from authorization until Aug. 29 transactions under Memorandum method and journal entry method
2. Prepare the stockholders' equity under the two methods.
0,000 shares and 10%

by share certificates
35 respectively

ance and issued share certificate.

d journal entry method

Princess Mae A. Macalaguing
BS Accountancy- Block A
Memorandom Entry

Aug. 5, 2021

PREFERENCE SHARE CAPITAL

8/5/2021 Authorized to issue 50,000 shares
at par value of P30

ORDINARY SHARE CAPITAL

8/5/2021 Authorized to issue 100,000 shares
at par value of P100

Subscription Receivable - Preference 420,000

Subscription Receivable - Ordinary 2,700,000
Subscribed share capital - Preference 420,000
Subscribed share capital - Ordinary 2,700,000
To record the subscription of the incorporators

Cash 3,120,000
Subscription Receivable - Preference 420,000
Subscription Receivable - Ordinary 2,700,000
To record the payment on incorporators

Incorporation Expense 25,000

share capital - ordinary 20,000
Share premium - ordinary 5,000
To record incorporation expense worth P25,000

Aug. 10 Subscribed share capital - Preference 420,000

Subscribed share capital - Ordinary 2,700,000
Share capital - Preference
Share capital - Ordinary
To record the issuance of share certificate after full payment of incorporators.

Aug. 15 Subscription Receivable - Ordinary 105,000

Subscription Receivable - Preference 7,000
Subscribed share capital - Ordinary
Subscribed share capital - Preference
Share premium - Ordinary
Share premium - Preference
 to record the subscription of Cabreros of 1,000 ordinary shares at P105 and
200 preference shares at P35

Aug. 15 Cash 22,400

Subcription Receivable - Ordinary
Subcription Receivable - Preference
To record the 20% downpayment of each class of shares

Aug. 20 Subscription Receivable - Ordinary 315,000

Subscribed share capital - Ordinary
Share premium - Ordinary
To record the subscription of Tumulak of 3000 ordinary shares at P105

Lot 315,000
Subscription Receivable
To record exchange lot with Tumulak

Subscribed share capital - Ordinary 300,000

Share capital - Ordinary
to record the issuance of share certificate after full payment

Aug. 28 Subscription Receivable - Preference 64,000

Subscribed share capital - Preference
Share premium - preference
to record the subscription of Limbago to 2,000 preference shares at P32

Cash 64,000
Subscription Receivable

Subscribed share capital - preference 60,000

Share capital - preference
to record the issuance of share certificate after full payment

Aug. 29 Cash 84,000

Subscription Receivable - Ordinary
to record the full payment of subscribed ordinary shares of Cabreros

Subscribed share capital - Ordinary 100,000

Share capital - Ordinary
to record the issuance of share certificate after full payment of ordinary shares of Ca
 Journal Entry Method

Aug. 5, 2021

Unissued share capital - preference

Unissued share capital - Ordinary
Authorized share capital - preference
Authorized share capital - Ordinary
To record authorisation of 50,000 preference share with par value of P30 and 100,000

Subscription Receivable - Preference

Subscription Receivable - Ordinary
Subscribed share capital - Preference
Subscribed share capital - Ordinary
To record the subscription of the incorporators

Cash
Subscription Receivable - Preference
Subscription Receivable - Ordinary
To record the payment on incorporators

Incorporation Expense
Unissued share capital - ordinary
Share premium - ordinary
To record incorporation expense worth P25,000

Subscribed share capital - Preference

Subscribed share capital - Ordinary
420,000 Unissued Share capital - Preference
2,700,000 Unissued Share capital - Ordinary
orporators. To record the issuance of share certificate after full payment

Subscription Receivable - Ordinary

Subscription Receivable - Preference
100,000 Subscribed share capital - Ordinary
6,000 Subscribed share capital - Preference
5,000 Share premium - Ordinary
1,000 Share premium - Preference
 to record the subscription of Cabreros of 1,000 ordinary shares at P105 and
200 preference shares at P35

Cash
21,000 Subcription Receivable - Ordinary
1,400 Subcription Receivable - Preference
To record the 20% downpayment of each class of shares

Subscription Receivable - Ordinary

300,000 Subscribed share capital - Ordinary
15,000 Share premium - Ordinary
To record the subscription of Tumulak of 3000 ordinary shares at P105

Lot
315,000 Subscription Receivable
To record exchange lot with Tumulak

Subscribed share capital - Ordinary

300,000 Unissued Share capital - Ordinary
to record the issuance of share certificate after full payment

Subscription Receivable - Preference

60,000 Subscribed share capital - Preference
4,000 Share premium - preference
to record the subscription of Limbago to 2,000 preference shares at P32

Cash
64,000 Subscription Receivable

Subscribed share capital - preference

60,000 Unissued Share capital - preference
to record the issuance of share certificate after full payment

Cash
84,000 Subscription Receivable - Ordinary
to record the full payment of subscribed ordinary shares of Cabreros

Subscribed share capital - Ordinary

100,000 Unissued Share capital - Ordinary
f ordinary shares of Cabreros to record the issuance of share certificate after full payment of ordinary shares of C
 1,500,000
10,000,000
1,500,000
10,000,000
hare with par value of P30 and 100,000 ordinary shares with par value of P100

420,000
2,700,000
420,000
2,700,000

3,120,000
420,000
2,700,000

25,000
20,000
5,000

420,000
2,700,000
420,000
2,700,000
full payment

105,000
7,000
100,000
6,000
5,000
1,000
 ordinary shares at P105 and

22,400
21,000
1,400

315,000
300,000
15,000
ordinary shares at P105

315,000
315,000

300,000
300,000
full payment

64,000
60,000
4,000
preference shares at P32

64,000
64,000

60,000
60,000
full payment

84,000
84,000
ary shares of Cabreros

100,000
100,000
fter full payment of ordinary shares of Cabreros
Cash
Princess Mae A. Macalaguing
BS Accountancy- Block A
Memorandom method

Contributed Capital
Share Capital
10% Preference Share, P30 par, 50,000 shares authorized,
16,000 shares were issued
Subscribed share capital - Preference
Less: Subscription Receivable
Issued and subscribed

Ordinary share, P100 par, 100,000 shares authorized, 30,200 shares were issued
Subscribed share capital - ordinary
Issued and subscribed - ordinary
Total Issued and subscribed - Preference and Ordinary
Share Premium - Preference
Share Premium - Ordinary
Total Shareholders' Equity

Journal Entry Method

Contibuted Capital
Share Capital
10% Preference Share, 50,000 shares at P30 par value
Less: Unissued share capital - Preference, 34,000 shares
Issued Share Capital - Preference
Less: Subscription Receivable - Preference
Issued and Subscribed - Preference

Ordinary Share - Authorized 100,000 shares at P100 par value

Less: Unissued share capital - Ordinary, 69,800 shares
Issued Share Capital, 30,200 shares
Subscribed Share Capital - Ordinary
Issued and Subscribed - Ordinary
Total Issued and subscribed - Preference and Ordinary
Share Premium - Preference
Share Premium - Ordinary
Total Shareholders' Equity
 shares authorized,
480,000
6,000
5,600 400
400

res authorized, 30,200 shares were issued 3,020,000

100,000
3,120,000
ce and Ordinary 3,120,400
5,000
20,000 25,000
3,145,400

t P30 par value 1,500,000

ce, 34,000 shares 1,020,000
6,000
5,600 400
480,400

hares at P100 par value 10,000,000

, 69,800 shares 6,980,000
3,020,000
100,000
3,120,000
ce and Ordinary 3,600,400
5,000
20,000 25,000
3,625,400
Princess Mae A. Macalaguing
BS Accountancy - Block A

No. Account Title Debit Credit

1 Land P550,000
Share Capital- preference 500,000
Share Premiumppreference 50,000

2 Land 550,000
Share Capital- preference 500,000
Share Premiumppreference 50,000

3 Land 500,000
Share Capital- preference 500,000