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n May 12, 20,000 preference shares were converted to ordinary shares. n June 9, 15,000 shares were subscribed for a total amount of P175,000 n July 4, a 2 for 1 share split was affected for the ordinary share.

n May 12, 20,000 preference shares were converted to ordinary shares. n June 9, 15,000 shares were subscribed for a total amount of P175,000 n July 4, a 2 for 1 share split was affected for the ordinary share.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. Journal entries for each of the transaction 

PROBLEM 1: You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December31, 2019. Glory Corp. was incorporated in early 2018 when it was authorized by SEC to issue 500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The following schedule reflects the company's capital balances as of December 31, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at P50 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 Total shareholders' equity P1,400,000 2,500,000 540,000 P 3,440,000 Your inquiries and investigation revealed the following transactions, which occurred in 2019:
Transcribed Image Text:PROBLEM 1: You were assigned to audit the shareholders' equity of Glory Inc. for the year ended December31, 2019. Glory Corp. was incorporated in early 2018 when it was authorized by SEC to issue 500,000 ordinary shares (P10 par) and 100,000 convertible preference shares (P20 par). The following schedule reflects the company's capital balances as of December 31, 2018: Ordinary shares, 100,000 shares issued during the company's incorporation in exchange of a land with a fair value of P1.4 M. Preference shares, 50,000 shares issued during the company's incorporation at P50 per share. Each preference share is convertible to four ordinary shares Retained earnings, which is the company's net income in 2018 Total shareholders' equity P1,400,000 2,500,000 540,000 P 3,440,000 Your inquiries and investigation revealed the following transactions, which occurred in 2019:
d. On April 1, the company retired 5,000 treasury shares. On May 12, 20,000 preference shares were converted to ordinary shares. f. e. On June 9, 15,000 shares were subscribed for a total amount of P175,000 g. On July 4, a 2 for 1 share split was affected for the ordinary share.
Transcribed Image Text:d. On April 1, the company retired 5,000 treasury shares. On May 12, 20,000 preference shares were converted to ordinary shares. f. e. On June 9, 15,000 shares were subscribed for a total amount of P175,000 g. On July 4, a 2 for 1 share split was affected for the ordinary share.
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