PROBLEM 1: The following events and transactions relate to the shareholder's equity accounts of the Reverse Corporation in 2020: Jan 3 The articles of incorporation were received, authorizing Reverse Corporation to issue 100,000 shares of P5 par ordinary shares and 30,000 shares of P50 par preference shares. Jan 5 Received subscriptions to 25,000 ordinary shares and 13,000 preference shares. The subscription price was P15 for ordinary share and P60 for preference share; one third of the total of each class of share was received as a down payment. Jan 9 200 preference shares were issued to the lawyers in payment for legal services rendered in drawing up the articles of incorporation. A value of P56 per share was deemed appropriate. Jan 15 50% of the remaining balance of preference shares subscribed in Jan 5 was collected. Jan 31 Issued 20,000 ordinary shares in exchange for building with book value of 80,000. Collected the balance due on the subscribed ordinary and preference shares. The share certificates were issued. Feb 15 Feb 28 Received subscription of 5,000 ordinary shares at P8. 50% was collected. Mar 1 Issued 2,000 ordinary shares for cash at P6 per share. Accepted subscriptions to 3,800 preference shares at P62 per share. The subscribers each made down payments of 40% of the subscription price. Mar 31 Required: 1. Prepare journal entries using Journal entry method for the quarter ended2020.
PROBLEM 1: The following events and transactions relate to the shareholder's equity accounts of the Reverse Corporation in 2020: Jan 3 The articles of incorporation were received, authorizing Reverse Corporation to issue 100,000 shares of P5 par ordinary shares and 30,000 shares of P50 par preference shares. Jan 5 Received subscriptions to 25,000 ordinary shares and 13,000 preference shares. The subscription price was P15 for ordinary share and P60 for preference share; one third of the total of each class of share was received as a down payment. Jan 9 200 preference shares were issued to the lawyers in payment for legal services rendered in drawing up the articles of incorporation. A value of P56 per share was deemed appropriate. Jan 15 50% of the remaining balance of preference shares subscribed in Jan 5 was collected. Jan 31 Issued 20,000 ordinary shares in exchange for building with book value of 80,000. Collected the balance due on the subscribed ordinary and preference shares. The share certificates were issued. Feb 15 Feb 28 Received subscription of 5,000 ordinary shares at P8. 50% was collected. Mar 1 Issued 2,000 ordinary shares for cash at P6 per share. Accepted subscriptions to 3,800 preference shares at P62 per share. The subscribers each made down payments of 40% of the subscription price. Mar 31 Required: 1. Prepare journal entries using Journal entry method for the quarter ended2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 81PSA
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Transcribed Image Text:PROBLEM 1: The following events and transactions relate to the shareholder's equity accounts
of the Reverse Corporation in 2020:
Jan 3
The articles of incorporation were received, authorizing Reverse Corporation to
issue 100,000 shares of P5 par ordinary shares and 30,000 shares of P50 par
preference shares.
Jan 5
Received subscriptions to 25,000 ordinary shares and 13,000 preference shares.
The subscription price was P15 for ordinary share and P60 for preference share;
one third of the total of each class of share was received as a down payment.
Jan 9
200 preference shares were issued to the lawyers in payment for legal services
rendered in drawing up the articles of incorporation. A value of P56 per share was
deemed appropriate.
Jan 15
50% of the remaining balance of preference shares subscribed in Jan 5 was
collected.
Jan 31
Issued 20,000 ordinary shares in exchange for building with book value of 80,000.
Collected the balance due on the subscribed ordinary and preference shares. The
share certificates were issued.
Feb 15
Feb 28
Received subscription of 5,000 ordinary shares at P8. 50% was collected.
Mar 1
Issued 2,000 ordinary shares for cash at P6 per share.
Accepted subscriptions to 3,800 preference shares at P62 per share. The
subscribers each made down payments of 40% of the subscription price.
Mar 31
Required:
1. Prepare journal entries using Journal entry method for the quarter ended2020.
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