Villarama Corp was organized on Jan 1, 2019. It is authorized to issue 20,000 shares of...

Villarama Corp was organized on Jan 1, 2019. It is authorized to issue 20,000 shares of 6% P50 par value preference shares and 50,000 shares of no-par ordinary shares with a stated value of P10 per share. The following stock transactions were completed during the year.

Jan 10 issued 10,000 ordinary shares for cash at P35 per share

Mar 1 Issued 10,000 preference shares for cash at P55 per share

Apr 1 issued 2,500 ordinary shares for land. The asking price of the land was P90,000, the FMV of the land was P85,000

May 1 Issued 7,500 ordinary shares for cash at P40 per share

Aug 1 issued 1,000 ordinary shares to lawyers in payment of their bill for P50,000 pertaining to services rendered in helping the corporation organize

Sep 1 issued 500 ordinary shares for cash at P60 per share

Nov 1 issued 2,000 preference shares for cash at P53 per share

Required:

Journalize the transactions.
Post to the shareholders' equity accounts
Prepare the share capital section of the shareholders' equity as at Dec 31, 2019.

Solutions

Expert Solution

Jan. 10	Cash ( 10000 * 35 )	350000
	Common stock ( 10000 * 10 )		100000
	Additional PIC In excess of stated value		250000

1-Mar	Cash ( 10000 * 55 )	550000
	preference stock ( 10000 * 50 )		500000
	Additional PIC In excess of par value		50000

April 1-	Land	90000
	Common stock ( 2500 * 10 )		25000
	Additional PIC In excess of stated value		65000

1-May	Cash ( 7500*40)	300000
	Common stock ( 7500 * 10 )		75000
	Additional PIC In excess of stated value		225000

1-Aug	Organisation expenses	50000
	Common stock ( 1000 * 10 )		10000
	Additional PIC In excess of stated value		40000

1-Sep	Cash ( 500 * 60)	30000
	Common stock ( 500* 10 )		5000
	Additional PIC In excess of stated value		25000

1-Nov	Cash ( 2000 * 53)	106000
	preference stock ( 2000* 50 )		100000
	Additional PIC In excess of par value		6000

Common stock
Cl. Bal.	190000	Cash	100000
		Land	75000
		Organisation expenses	10000
		Cash	5000
	190000		190000

Preferred stock
Cl. Bal.	600000	Cash	500000
		Cash	100000
	600000		600000

Additional PIC In excess of stated value
Cl. Bal.	380000	Cash	250000
		Land	65000
		Organisation expenses	40000
		Cash	25000
	380000		380000

Additional PIC In excess of par value
Cl. Bal.	56000	Cash	50000
		Cash	6000
	56000		56000

Shareholder equity section
Common stock	190000
preference stock	600000
Additional PIC In excess of stated value	380000
Additional PIC In excess of par value	56000
	1226000

ekkarill92 answered 1 year ago

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