Problem Solving
Journal Entries
Blue Ocean, Inc. was organized at the beginning of the current year and was authorized to issue share capital of 100,000 shares of P50 par valueLand with fair value of P600,000 was acquired upon issuance of 10,000 shares.
- Land-P600,000
Share capital-500,000
Additional Paid in Capital -100,000
Cash subscription to 5,000 shares at 60 per share was received.
- Cash-300,000
Share Capital-250,000
Additional Paid in Capital- 50,000
Paid legal fees amounting to P20,000 in connection with the incorporation.
- Legal Expense- 20,000
Cash-20,000
Based on the above items, answer the following. (2 points each - 6 points)8. How much is the total assets?- P2,130,000
1. How much is the total liabilities-0
2. How much is the total equity?-P2,130,000
Stockholders' Equity
Project the Total Stockholders' equity for 2 years
Year 1 - Initial year of operation
Issued 10,000 common shares at P100 par value
Net Income was P200,000
Year 2
Net Income was P100,000Dividends were declared for P20 for each share outstanding
Format
Year 1 Year 2
Common stocks 1,000,000 1,000,000
Retained Earnings 200,000 100,000
Total Stockholders' Equity 1,200,000 1,100,000
Application - Preparation of Articles of Incorporation
Form a scenario that you will put up a Corporation. Document this in the Articles of Incorporation