Direction: Read and solve the following problems. Write the answer on the space provided before each number.
Problem 1. MLB Inc. began operations on January 1. Authorized were 20,000 shares of P10 par value ordinary shares and 40,000 shares of 10%, P100 par value preference shares. The following transactions involving shareholder's equity occurred during the first year of operations:
Jan. 1 - Issued 500 ordinary shares to the corporation promoters in exchange for property valued at P170,000 and services valued at P70,000. The property had cost the promoters P90,000 3 years before and was carried on the promoter's books at P50,000.
Feb. 23 - Issued 10,000 preference shares with a par value of P100 per share. The shares were issued at a price of P150 per share, and the company paid P75,000 to an agent for selling the shares.
Mar. 10 - Sold 3,000 ordinary shares for P390 per share. Issue costs were P25,000.
Apr. 10 - 4,000 ordinary shares were sold under stock subscriptions at P450 per share. No shares are issued until a subscription contract is paid in full. No cash was received.
July 14 - Exchanged 700 ordinary shares and 1,400 preference shares for a building with a fair market value of P510,000. The building was originally purchased for P380,000 by the investors and has a book value of P220,000. In addition, 600 ordinary shares were sold for P240,000 in cash.
Aug. 3 - Received payments in full for half of the share subscriptions and payments on account on the rest of the subscriptions. Total cash received was P1,400,000. Shares of stock were issued for the subscription paid in full.
Dec. 1 - Declared a cash dividend of P10 per share on preference shares, payable on December 31 to shareholders of record on December 15, and a P20 per share cash dividend on ordinary shares, payable on January 5 of the following year to shareholders of record on December 15.
Dec. 31 - Paid the dividends to preference shareholders.
Dec. 31 - The net income for the first year of operations was P600,000.
Required: Based on the preceding information, calculate the balances of each of the following accounts:
1. Preference Shares
2. Share premium - preference shares
3. Ordinary Shares
4. Share premium - ordinary shares
5. Retained Earnings