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    Basic Finance Major Output

    Uploaded by

    Kazia Perino
    The document describes share transactions for Sorima Corporation from 2018 to 2019. It asks to record journal entries for the transactions, prepare the share capital section of the balance sheet for 2018 and 2019, show a table of dividend allocations, and record an entry for issuing shares.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Basic Finance Major Output

    Uploaded by

    Kazia Perino
    935 views3 pages
    The document describes share transactions for Sorima Corporation from 2018 to 2019. It asks to record journal entries for the transactions, prepare the share capital section of the balance sheet for 2018 and 2019, show a table of dividend allocations, and record an entry for issuing shares.

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    The document describes share transactions for Sorima Corporation from 2018 to 2019. It asks to record journal entries for the transactions, prepare the share capital section of the balance sheet for 2018 and 2019, show a table of dividend allocations, and record an entry for issuing shares.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    935 views3 pages

    Basic Finance Major Output

    Uploaded by

    Kazia Perino
    The document describes share transactions for Sorima Corporation from 2018 to 2019. It asks to record journal entries for the transactions, prepare the share capital section of the balance sheet for 2018 and 2019, show a table of dividend allocations, and record an entry for issuing shares.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    MAJOR OUTPUT

    B. Sorima Corporation began operations on Jan. 1, 2018. The following transactions


    relating to shareholder's equity occurred in the first two years of the corporation's
    operations:

    2018
    Jan. 1 Authorized the issuance of 2 million shares of P5 par value ordinary shares and
    100,000 shares of P100 par value, 10% cumulative preference shares.
    Jan. 2 Issued 200,000 shares or ordinary shares for P12 cash per share.
    Jan. 3 Issued 100,000 shares of ordinary shares in exchange for a building valued at
    P820,000 and merchandise inventory valued at P380,000.
    Jan. 4 Paid P10,000 cash to the corporation's founders for organization activities
    Jan. 5 Issued 12,000 shares of preference shares for P110 cash per shares.
    2019
    June 4 Issued 100,000 shares or ordinary shares for P15 cash per share.
    Required:

    1. Prepare the journal entries to record these transactions.


    2. Prepare the share capital section of the shareholder's equity as at Dec. 31, 2018 and Dec.
    31, 2019.
    3. Make a table showing dividend allocations and dividends per share for 2018 and 2019
    assuming the corporation declared the following cash dividends: 2018, P50,000, and 2019,
    P300,000.
    4. Prepare the Jan. 2, 2018 journal entry for the issuance of 200,000 ordinary shares for P12
    cash per share assuming:

    a. Ordinary shares is no-par without as stated value.


    b. Ordinary shares is no-par with a stated value of P10 per share.

    1. Prepare the journal entries to record these transactions.


    Date Debit Credit
    1/1 Authorized the issuance of 2 million shares of P5 par value
    ordinary shares and 100,000 share of P100 par value, 10%
    cumulative preference shares.
    1/2 Cash 200,000 x 12 2,400,000
    Ordinary Share (200,000x5) 1,000,000
    Shares Premium-ordinary 200,000x7 1,400,000

    1/3 Building 820,000


    Merchandise Inventory 380,000
    Ordinary Shares (100,000x5) 500,000
    Share Premium- Ordinary excess to be credited at 700,000
    share- premium 1,200,000-500,000

    1/4 Organization expenses 10,000


    Cash 10,000

    1/5 Cash 12,000 x 110 issued price par 1,320,000


    Preference Share 12,000 x 100 1,200,000
    Share Premium- Preference 12,000 x 10 excess 120,000

    6/4 Cash 100,000 x 15 1,500,000


    Ordinary Share 100,000 x 10 1,000,000
    Share Premium- Ordinary 100,000 x 5 500,000

    2. Prepare the share capital section of the shareholder's equity as at Dec. 31, 2018 and
    Dec. 31, 2019.

    Share Capital
    10% preference share P100 par value 100,000 share authorized
    12,000 share issued and outstanding 120,000
    Share Premium- Preference Share 120,000 1,320,000
    Ordinary share- P5 par, 2 million authorized, 400,000 2,000,000
    issued and outstanding
    Share Premium- Ordinary 3,100,000
    Total Share Capital 6,420,000

    Sorima Corporation
    Shareholder's Equity
    Dec 31, 2019
    Share capital
    Ordinary share 500,000
    Share Premium- Ordinary 1,000,000 1,500,000
    Total Share Capital 1,500,000

    3. Make a table showing dividend allocations and dividends per share for 2018 and
    2019 assuming the corporation declared the following cash dividends: 2018, P50,000,
    and 2019, P300,000.

    Dividend per Share of Preference share capital 10


    Dividend per year of Preference Share capital 1,000,000

    Allocations in Dividends

    Cumulative Dividends
    Year Preference Share In Arrears Ordinary Shares
    2018 50,000 950,000 -
    2019 300,000 700,000 -
    Total 350,000 1,650,000 -

    4. Prepare the Jan. 2, 2018 journal entry for the issuance of 200,000 ordinary shares
    for P12 cash per share assuming:

    Dates Debit Credit


    A. 1/2 Cash 2,400,000
    Ordinary Shares 2,400,000

    B. 1/2 Cash 2,400,000


    Ordinary Shares- Capital 2,000,000
    Share Premium 400,000

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