PROBLEM 10-1

1) a PSC  Subscription Receivable (10,000 sh x P125) 1,250,000

OSC  Subscription Receivable (20,000 sh x P60) 1,200,000
    PSC Subscribed (10,000 sh x P100)
    OSC Subscribed (20,000 sh x P50)
    Preference Share Premium 
    Ordinary Share Premium  
Cash 1,225,000
    PSC Subscription Receivable (P1,250,000 x 50%)
    OSC  Subscription Receivable   (1,200,000 x 50%)
b. Cash 1,225,000
    PSC Subscription Receivable
    OSC Subscription Receivable

PSC Subscribed 1,000,000

OSC  Subscribed 1,000,000
    Preference Share Capital
    Ordinary Share Capital
c. Treasury Shares - Ordinary Share Capital (2,500 sh x P50) 125,000
    Cash

d. Preference Share Capital (3,000 sh x P100) 300,000

Preference Share Premium  (3,000 x P25) 75,000
    Ordinary Share Capital (3,000 sh x P50)
    PIC from Conversion of PSC into OSC

e. Cash (1,500 sh x P65) 97,500

    Treasury Shares  (1,500 sh x P50)
    PIC from Sale of Treasury Shares

f. Received 2,000 ordinary  shares as donation from a major shareholder

g. Cash (2,000 x P56) 112,000

    Donated Capital

h. Cash (1,000 sh x P60) 60,000

    Treasury Shares (1,000 sh x P50)
    PIC from Sale of Treasury Shares

i. Ordinary Share Capital, P50 par (23,000 x P50) 1,150,000

Ordinary Share Premium 200,000
    Ordinary Share Capital, P30 stated value (23,000 sh x
P30)
    PIC from Exchange of Par for No-Par Shares 
 j. Income Summary 1,500,000
    Retained Earnings

k. Retained Earnings 93,000

    Dividends Payable
          PS =   7,000 sh x P100 x 10% = P70,000
          CS = 23,000 sh x P1                =   23,000
2) SHAREHOLDER'S EQUITY
Contributed Capital:
    Share Capital:
10% Preference Share Capital, P100 par, 20,000 shares
authorized, 7,000 shares issued and outstanding

Ordinary Share Capital, P30 stated value, 50,000

shares authorized, 23,000 shares issued and outstanding
  
Additional Paid-in Capital:
Preference share Premium
Paid-in Capital from Exchange of Par for No-Par  Shares 
Paid-in Capital from Sale of Treasury Shares
Paid-in Capital from Conversion of PSC into OSC
Donated Capital
            Total Contributed Capital
Retained Earnings
Total Shareholders’ Equity

PROBLEM 10-2
1)
a. Treasury Shares – Ordinary SC (5,000 sh x P16) 80,000
    Cash

Retained Earnings 80,000

      Retained Earnings Appropriated for Treasury Shares 

b. Preference Share Capital (10,000 sh x P100) 1,000,000

Preference Share Premium (10,000 sh x P5) 50,000
    PIC from  Conversion of PSC into  OSC 
    Ordinary Share Capital (10,000 x 4 x P20)

c. Accounts Payable 12,500

    Ordinary Share Capital (500 sh x P20)
    Ordinary Share Premium

d. Retained Earnings 571,000

    Dividends Payable
      PSC= 40,000 x P100 = P4,000,000 x 5%  =       P200,000
       OSC = (150,000 + 40,000 + 500 – 5,000) x P2 =P371,000

e. Land 50,000
    Treasury Shares (2,000 sh x P16)
      PIC from Sale of Treasury Shares

Retained Earnings Appropriated for treasury Shares 32,000

      Retained Earnings

f. Ordinary Share Capital, P20 par(150,000 + 40,000 + 500) x P 3,810,000

    Ordinary Share Capital, P10 par

g. Income Summary 200,000

    Retained Earnings

2
Contributed Capital:
    Share Capital:
5% Preference Share Capital, P100 par, 40,000 shares  
      issued and outstanding ₱ 4,000,000
Ordinary Share Capital, P10 par,  381,000 shares issued, 
      378,000 shares outstanding, 3,000 shares in treasury 3,810,000
Additional Paid-in Capital:
Preference Share Premium ₱ 200,000
Ordinary Share Premium 752,500
Paid-in Capital from Sale of Treasury Shares 18,000
Paid-in Capital from Conversion of PSC  into OSC 250,000
Total Contributed Capital
Retained Earnings:
        Retained Earnings Appropriated for treasury Shares ₱ 48,000
        Unappropriated Retained Earnings 1,081,000
Total Contributed Capital and Retained Earnings
Less Treasury Shares at Cost (3,000 shares)
Total Shareholders’ Equity

PROBLEM 10-3
SHAREHOLDERS’ EQUITY
Contributed Capital:
Share Capital:
10%  Preference Share Capital, P50 par, 115,000  
      shares issued and outstanding ₱ 5,750,000
Ordinary Share Capital, P5 par, 2,050,000 shares 
      issued, including 5,000 shares in the treasury 10,250,000
Additional paid-in capital:
Preference Share Premium ₱ 1,150,000
Ordinary Share Premium 5,375,000
 Paid-in Capital from Sale of Treasury Shares 30,000
Total Contributed Capital
Retained Earnings:
        Retained Earnings Appropriated for Treasury Shares ₱ 70,000
        Unappropriated Retained Earnings 4,310,000
Total Contributed Capital and Retained Earnings
Less Treasury Shares, at cost (5,000 shares)
Total Shareholders’ Equity

PROBLEM 10-4
Assets Liabilities SE
1 D NE D
2 I NE I
3 I NE I
I NE I
4 NE NE NE
*The indicated loss may be debited to the APIC arising from sale of the treasury Share Capital in No. 2 or such  in

PROBLEM 10-5
Javier Company
Statement of Changes in Shareho
For the Fiscal Year Ended June

Preference Shares
Balances, June 30, 2013 ₱ 3,000,000
Issuance of 5,000 PSC @ P140 500,000
Issuance of 20,000 OSC @ P70
Retirement of 1,000 PSC @ P150 (100,000)
Purchase of  5,000 TS @ P80
Share   split of 2 for 1
Reissuance of TS @ P52
Declaration of dividends
  PSC = P3,400,000 x 10%
  OSC = 235,000 x P6
Profit for the year
Balances, June 30,  2014 ₱ 3,400,000
 1,000,000
1,000,000
250,000
200,000

625,000
600,000

625,000
600,000

1,000,000
1,000,000

125,000

150,000
225,000

75,000
22,500

der

112,000

50,000
10,000

690,000
660,000
 1,500,000

93,000

₱ 700,000

690,000 ₱ 1,390,000

₱ 175,000
660,000
32,500
225,000
112,000 1,204,500
₱ 2,594,500
1,407,000
₱ 4,001,500

80,000

80,000

250,000
800,000

10,000
2,500

571,000
 32,000
18,000

32,000

3,810,000

200,000

₱ 7,810,000

1,220,500
9,030,500

1,129,000
₱ 10,159,500
48,000
₱ 10,111,500

₱ 16,000,000
 6,555,000
22,555,000
   

4,380,000
₱ 26,935,000
70,000
₱ 26,865,000

APIC RE Profit
NE NE NE
I NE NE
D* NE* NE    
NE* D* NE
D D NE
pital in No. 2 or such  indicated loss may be debited to retained earnings.

Javier Company
nt of Changes in Shareholders’ Equity
e Fiscal Year Ended June 30, 2014

Outstanding Shares APIC Retained Earnings Treasury Shares

₱ 1,000,000 ₱ 9,200,000 ₱ 2,550,000
200,000
200,000 1,200,000
(40,000) 100,000
400,000

60,000 (200,000)

(300,000)
(1,410,000)
750,000
₱ 1,200,000 ₱ 10,620,000 ₱ 1,540,000 ₱ 200,000