Question

Batangas Corporation was organized on March 1, 2014 with authorized share capital of 20,000 shares comprised of 7% preference shares with a P50 par value and 30,000 ordinary shares with a P30 par value. Marl Incorporators subscribed 25% of the authorized preference share capital and ordinary share capital at par and paid 25% of the total subscriptions... 15 Collected from the incorporators 50% of the balance of their subscriptions 31 Collected the remaining balance of the incorporators' subscriptions April 1 Subscriptions were received for 3,000 shares of ordinary share capital at P42 per share, P22 per share down payment with the balance payable in two equal installments due on May 1 and June 1. 2 Issued 16,500 ordinary shares to Mr. Amiel in exchange for his business. Assets transferred to the corporation were valued as follows: Buildings, P350,000, Equipment, P55,000, Merchandise, P140,000. 29 Subscriptions were received for 12,000 shares of preference share capital at P55 per share, P180,000 down payment with the balance payable in two equal installments due on May 1 and June 1 May 1 Amounts due on this date were collected from all ordinary and preference share subscribers. 5 Issued 50 preference shares to an attorney as payment for a bill for P3,200 covering legal fees in organizing the corporation 12 Remaining ordinary shares were subscribed at P35 per share with a 25% down payment and the balance in two equal installments due June 15 and July 15. 26 Issued 500 preference shares for cash at P55. Junel Amounts due on this date were collected from ordinary and preference share subscribers. Required: 1. Prepare journal entries to record the foregoing transactions, 2. Compute the contributed capital per class of share

Answer 1

1. Journal Entries :

Date	Particulars	Dr.	Cr.
01-03-2014	Cash Dr.	118750
	Incorporators Dr.	356250
	To Preference Share Capital		250000
	To Ordinary Share Capital		225000
15-03-2014	Cash Dr.	178125
	To Incorporators		178125
31-03-2014	Cash Dr.	178125
	To Incorporators		178125
01-04-2014	Cash Dr.	66000
	Ordinary Shareholders Dr.	60000
	To Ordinary Share Capital		90000
	To Securities Premium		36000
02-04-2014	Buildings Dr.	350000
	Equipment Dr.	55000
	Merchandise Dr.	140000
	To Ordinary Share Capital		495000
	To Securities Premium		50000
29-04-2014	Cash Dr.	180000
	Preference Shareholders Dr.	480000
	To Preference Share Capital		600000
	To Securities Premium		60000
01-05-2014	Cash Dr.	270000
	To Ordinary Shareholders		30000
	To Preference Shareholders		240000
05-05-2014	Legal Fees Dr.	3200
	To Preference Share Capital		2500
	To Securities Premium		700
12-05-2014	Cash Dr.	26250
	Ordinary Shareholders Dr. (3000 shares)	78750
	To Ordinary Share Capital		90000
	To Securities Premium		15000
	(No. of shares= 30000-7500-3000-16500=3000)
26-05-2014	Cash Dr.	27500
	To Preference Share Capital		25000
	To Securities Premium		2500
01-06-2014	Cash Dr.	270000
	To Ordinary Shareholders		30000
	To Preference Shareholders		240000

2. Contributed Capital per Class of Share :

• Ordinary Share Capital = 225000+90000+495000+90000=900000
• Preference Share Capital = 250000+600000+2500+25000=877500.