Problem 20-1

Req 1 Subscription Receivable 1,250,000

Subscription Share Capital 1,250,000

Req 1.2 Cash 312,500

Subscription Receivable 312,500

Req 1.3 Subscribed Share Capital 750,000

Share Capital 750,000

Cash 562,500
Subscription Receivable 562,500

Req 1.4 Land 600,000

Share Capital 500,000
Share Premium 100,000

Req 1.5 Cash 300,000

Share Capital 250,000
Share Premium 50,000

Req 1.6 Legal Expenses 100,000

Share Capital 100,000

Req 2 Shareholder's Equity

Share Capital 1,600,000
Subscribed Share Capital 500,000
Subscription Receivable 375,000
Share Premium 150,000
Shareholder's Equity 1,875,000

Problem 20-2
Req 1.1 Unissued Share Capital 5,000,000
Authorized Share Capital 5,000,000

Subscription Receivable 2,000,000

Subscribed Share Capital 2,000,000

Req 1.2 Cash 500,000

Subscriptions Receivable 500,000

Req 1.3 Subscribed Share Capital 1,000,000

Unissued Share Capital 1,000,000

Cash 750,000
Subscriptions Receivable 750,000

Req 1.4 Patent 500,000

Unissued Share Capital 500,000
Req 1.5 Cash 1,800,000
Unissued Share Capital 1,500,000
Share Premium 300,000

Req 2 Shareholder's Equity

Authorized Share Capital 5,000,000
Unissued Share Capital 2,000,000
Issued Share Capital 3,000,000
Subscribed Share Capital 1,000,000
Subscriptions Receivable 750,000
Share Premium 300,000
Shareholder's Equity 3,550,000

Problem 20-3
Req 1.1 Subscription Receivable 4,000,000
Subscribed Share Capital 4,000,000

Req 1.2 Accounts Receivable 350,000

Note Receivable 70,000
Inventory 680,000
Accounts Payable 100,000
Subscription Receivable 1,000,000

Req 1.3 Land 150,000

Building 850,000
Subscription Receivable 1,000,000

Req 1.4 Cash 375,000

Subscription Receivable 375,000

Req 1.5 Legal Expenses 50,000

Share Capital 50,000

Req 1.6 Subscription Receivable 120,000

Subscribed Share Capital 100,000
Share Premium 20,000

Cash 40,000
Subscription Receivable 40,000

Req 1.7 Total Shares Subscribed Payment Paid Balance

A 1,200,000 1,000,000 200,000
B 1,300,000 1,000,000 300,000
C 800,000 200,000 600,000
Total Payment of A, B, and C 1,100,000

Cash 1,100,000
Subscriptions Receivable 1,100,000
 Subscribed Share Capital 3,300,000
Share Capital 3,300,000

Req 2 Authorized Share Capital 50,000 5,000,000

Unissued Share Capital 1,650,000
Issued Share Capital 3,350,000
Subscribed Share Capital 800,000
Subscriptions Receivable 605,000
Share Premium 20,000
Shareholder's Equity 3,565,000

Problem 20-4
1
Memorandum: The entity was authorized to issue share capital as
follows: Preference Share Capital, P100 par value, 30,000 shares and
Ordinary Share Capital, P50 par value, 100,000 shares.

2 Cash 2,400,000
Ordinary Share Capital 2,000,000
Share Premium - OS 400,000

3 Cash 1,200,000
Preference Share Capital 1,000,000
Share Premium - PS 200,000

4 Subscription Receivable 1,000,000

Subcribed Preference Share Capital 1,000,000

5 Cash 400,000
Subscription Receivable 400,000

6 Legal Expenses 100,000

Preference Share Capital 100,000

7 Property, Plant and Equipment 1,300,000

Ordinary Share Capital 1,000,000
Share Premium - OS 300,000

8 Subscription Receivable 750,000

Subscribed Ordinary Share Capital 750,000

9 Cash 300,000
Subscription Receivable 300,000

10 Cash 600,000
Subscription Receivable 600,000

Subscribed Preference Share Capital 1,000,000

 Preference Share Capital 1,000,000

11 Profit and Loss 2,000,000

Retained Earnings 2,000,000

Req 2 Ordinary Share Capital 3,000,000

Preference Share Capital 2,100,000
Subscribed Ordinary Share Capital 750,000
Subscribed Preference Share Capital -
Subscriptions Receivable 450,000
Share Premium - OS 700,000
Share Premium - PS 200,000
Retained Earnings 2,000,000
Shareholder's Equity 8,300,000

Problem 20-5
Req 1 Unissued Ordinary Share Capital 10,000,000
Authorized Ordinary Share Capital 10,000,000

Subcription Receivable 2,500,000

Subcsribed Ordinary Share Capital 2,500,000

Cash 625,000
Subscription Receivable 625,000

Cash 750,000
Subscription Receivable 750,000

Subscribed Ordinary Share Capital 1,000,000

Unissued Ordinary Share Capital 1,000,000

Land 800,000
Building 2,500,000
Unissued Ordinary Share Capital 3,000,000
Share Premium 300,000

Loan Payable 1,100,000

Accrued Interest Payable 200,000
Unissued Ordinary Share Capital 1,000,000
Share Premium 200,000
Gain on Extinguishment 100,000

Profit and Loss 3,000,000

Retained Earnings 3,000,000

Authorized Ordinary Share Capital 10,000,000

Unissued Ordinary Share Capital 5,000,000
Issued Ordinary Share Capital 5,000,000
Subscribed Ordinary Share Capital 1,500,000
 Sunscriptions Receivable 1,125,000
Share Premium 500,000
Retained Earnings 3,000,000
Shareholder's Equity 8,875,000

Problem 20-6
Req 1 Subscription Receivable - PS 2,000,000
Subscribed Preference Share Capital 2,000,000

Subscription Receivable - PS 480,000

Subscribed Preference Share Capital 400,000
Share Premium 80,000

Subscribed Preference Share Capital 2,200,000

Preference Share Capital 2,200,000

Cash 2,360,000
Subscription Receivable - PS 2,360,000

Land 230,000
Ordinary Share Capital 80,000
Share Premium - OS 150,000

Ordinary Shares Issued 24,000

Ordinary Subscribed 24,000
Total Ordinary Shares 48,000
Ordinary Share Issued for Land 8,000
Ordinary Shares Subscribed 40,000

Subscription Receivable - OS 1,200,000

Subscribed Ordinary Share Capital 400,000
Share Premium - OS 800,000

Cash 840,000
Subscription Receivable - OS 840,000

Subscribed Ordinary Share Capital 160,000

Ordinary Share Capital 160,000

Preference Ordinary
Shares Issued 2,200,000 240,000
Shares Subscripbed 200,000 240,000
Share Premium 80,000 950,000
Subscription Receivable 120,000 360,000
Contributed Capital 2,360,000 1,070,000

Problem 20-7
Jan-01 Land 2,500,000
 Service Expense 500,000
Ordinary Share Capital 1,000,000
Share Premium - OS 2,000,000

Feb-20 Cash 1,800,000

Preference Share Capital 1,500,000
Share Premium - PS 300,000

Share Premium - PS 50,000

Cash 50,000

Mar-10 Cash 6,500,000

Ordinary Share Capital 2,500,000
Share Premium - OS 4,000,000

Share Premium - OS 200,000

Cash 200,000

Apr-01 Subcription Receivable 7,000,000

Subscribed Ordinary Share Capital 2,000,000
Share Premium - OS 5,000,000

Jul-15 Share Capital Fraction Share Premium

Ordinary 1,200,000 0 2,625,000
Preference 2,000,000 1 4,375,000
3,200,000 7,000,000

Building 7,000,000
Ordinary Share Capital 1,200,000
Share Premium - OS 1,425,000
Preference Share Capital 2,000,000
Share Premium - PS 2,375,000

Cash 3,000,000
Ordinary Share Capital 1,000,000
Share Premium - OS 2,000,000

Aug-01 Cash 4,500,000

Subscription Receivable 4,500,000

Subscribed Ordinary Share Capital 1,000,000

Ordinary Share Capital 1,000,000

Aug-31 Subscribed Ordinary Share Capital 500,000

Share Premium - OS 1,000,000
Subscription Receivable 1,500,000
Share Premium - Forfeited -

Dec-31 Income Summary 3,000,000

 Retained Earnings 3,000,000

Req 2 Preference Share Capital Issued 3,500,000

Ordinary Share Capital Issued 6,700,000
Share Premium - PS 2,625,000
Share Premium - OS 13,225,000
Retained Earnings 3,000,000
Subscription Receivable 1,000,000
Shareholder's Equity 28,050,000

Problem 20-8
Req 1 Preference Share Capital 500,000
Share Premium - PS 50,000
Ordinary Share Capital 250,000
Share Premium - OS 300,000

Preference Share Capital 500,000

Share Premium - PS 50,000
Retained Earnings 450,000
Ordinary Share Capital 1,000,000

Req 2 Preference Share Capital 500,000

Share Premium - PS 50,000
Retained Earnings 50,000
Cash 600,000

Preference Share Capital 500,000

Share Premium - PS 50,000
Cash 400,000
Share Premium - PS 150,000

Problem 20-9
Year 2020
Jan-01 Cash 5,000,000
Redeemable Preference Shares 5,000,000

Dec-31 Interest Expense 500,000

Accrued Interest Payable 500,000

Year 2021
Dec-31 Interest Expense 500,000
Accrued Interest Payable 500,000

Year 2022
Jan-01 Redeemable Preference Share 5,000,000
Accrued Interest Payable 1,050,000
Cash 6,050,000