Answered: Villarama Corporation

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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Question

Villarama Corporation was organized on Jan. 1, 2018. 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 fair market value of the land was P85,000.

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

Aug. 1 Issues 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

Prepare the share capital section of the shareholders’ equity as at December 31, 2018.

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