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ParCor Accounting

Mercedez Corporation issued shares to five incorporators totaling 52,500 shares with various down payments. Additional stock transactions occurred throughout August and September, including shares issued for cash, land, and legal services. By September 14, some shareholders had paid their balances in full and received stock certificates while others made additional partial payments.

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258 views2 pages

ParCor Accounting

Mercedez Corporation issued shares to five incorporators totaling 52,500 shares with various down payments. Additional stock transactions occurred throughout August and September, including shares issued for cash, land, and legal services. By September 14, some shareholders had paid their balances in full and received stock certificates while others made additional partial payments.

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girlie
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Partnership & Corporation Accounting

Mercedez Corporation is authorized to issue 100,000 shares at P50 par value. On August 1,2014 five
incorporators made the following subscriptions with the corresponding down payments:

Incorporators Shares subscribed at par Down Payment

Aida Asis 7,500 P 93,750


Barbara Bello 10,000 125,000
Carlota Cruz 15,000 175,000
Daria Domingo 8,000 100,000
Estela Enriquez 12,500 150,000

The subscription contract calls for collection of 50% of the balance on August 31, and the remainder 30
days after. Additional stock transactions follow:

Aug 5 Penny Frances paid P55,000 for 1,000 shares.


15 The lawyer Atty. Pasco was given 500 shares for legal services billed at P25,000.
19 Received a piece of land costing P50,000 and issued 1,400 shares to Glo Gomez. Fair
market value of the land is P75,000.
23 Grace Quilatan and Helen Quilatan subscribed to 500 shares each at a subscription price
of P54 per share and gave a 25% down payment.
30 Aida and Barbara paid in full and certificates were issued to them.
31 The other incorporators paid the balance due.
Sept 7 Received P10,000 from another shareholder. Issued a certificate for 175 shares.
14 Helen paid another 25%. Grace paid in full and was issued a certificate.

Solution:

Memorandum Entry
Feb 1 The corporation was authorized to issue 1,000,000 shares with P10 par value.

Subscription Receivable 10,000,000


Subscribed Share Capital 10, 000,000
(1,000,000 x 10 par)

Subscribed Share Capital 4,000,000


Share Capital 4,000,000
(1,000,000 x 2) x 10 par

Cash 6,000,000
Subscription Receivable 6,000,000
(1,000,000 x 3) x 10 par

Feb 14 Cash (160,000 x P12 par) 1,920,000


Share Capital 1,920,000
Mar 14 Land 3,500,000
Ordinary Shares (Common Stock) 3,200,000
Paid in Capital in Excess of Par 300,000
(320,000 shares x 10 then less 3,500,000)

Apr 28 Legal Expenses 50,000


Ordinary Shares (Common Stock) 45,000
Paid in Capital in Excess of Par 5,000
(4,500 shares x 10 then less 50,000)

SHAREHOLDER’S EQUITY

Paid in Capital
Authorize to issue 1,000,000 shares, P10 par value
Share Capital, 592,000 shares P 5,920,000
Subscribed Share Capital, 600,000 shares 6,000,000
Total 11,920,000
Additional Paid in Capital
Share Premium 305,000
Total Paid in Capital 12,225,000
Total Shareholder’s Equity P12,225,000

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