0% found this document useful (0 votes)
20 views10 pages

Accounting For No Par Value Shares

The document discusses accounting for share capital transactions under different scenarios of shares having par value, stated value, or no par/stated value. It provides examples of journal entries for the issuance of shares for cash, property, and services on different dates. For shares with par value of P50, the entries debit cash and property and credit shares at par value with premium/discount accounted for. For stated value of P40, entries are similar but with stated value amount. For no par/stated value shares, entries simply debit cash/property for proceeds and credit shares issued.

Uploaded by

ghckk5m8dj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
20 views10 pages

Accounting For No Par Value Shares

The document discusses accounting for share capital transactions under different scenarios of shares having par value, stated value, or no par/stated value. It provides examples of journal entries for the issuance of shares for cash, property, and services on different dates. For shares with par value of P50, the entries debit cash and property and credit shares at par value with premium/discount accounted for. For stated value of P40, entries are similar but with stated value amount. For no par/stated value shares, entries simply debit cash/property for proceeds and credit shares issued.

Uploaded by

ghckk5m8dj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

Chapter 6

Accounting for Share Capital


Transactions

Mrs. Lucia A. Suello, CPA, MBA


ACCOUNTING FOR NO PAR VALUE SHARES
ISSUED FOR CASH
SEATWORK
Oct 2 Issued 10,000 shares for P60 per share.
8 Issued 7,500 shares for P50 per share.
21 Issued 2,500 shares for land. The fair market value of
the land was P112,000, while the shares are currently
trading at P55 per share
26 Issued 1,000 shares to lawyers in payment of their bill
amounting to P60,000 pertaining to services rendered
during incorporation.
Journalize the above transactions under the foll0wing assumptions:
Case 1 The ordinary share has a P50 par value.
Case 2 The ordinary share has a P40 stated value.
Case 3 The ordinary share has no-par or stated value.
CASE 1 WITH P50 PAR VALUE
Oct. 2 Cash (10,000 x P60) 600,000
Ordinary Shares (10,000 x P50) 500,000
Share premium 100,000

Oct. 8 Cash (7,500 x P50) 375,000


Ordinary Shares (7,500 x P50) 375,000

Oct. 21 Land 112,000


Discount on Share Capital 13,000
Ordinary Shares (2,500 x P50) 125,000

Oct. 26 Organization Expense 60,000


Ordinary Shares (1,000 x P50) 50,000
Share premium 10,000
CASE 2 WITH P40 STATED VALUE
Oct. 2 Cash (10,000 x P60) 600,000
Ordinary Shares (10,000 x P40) 400,000
SharePremium -SV 200,000

Oct. 8 Cash (7,500 x P50) 375,000


Ordinary Shares (7,500 x P40) 300,000
Share Premium -SV 75,000

Oct. 21 Land 112,000


Ordinary Shares (2,500 x P40) 100,000
Share Premium -SV 12,000

Oct. 26 Organization Expense 60,000


Ordinary Shares (1,000 x P40) 40,000
Share Premium -SV 20,000
CASE 3 NO PAR ,NO STATED VALUE
Oct. 2 Cash (10,000 x P60) 600,000
Ordinary Shares 600,000

Oct. 8 Cash (7,500 x P50) 375,000


Ordinary Shares 375,000

Oct. 21 Land 112,000


Ordinary Shares 112,000

Oct. 26 Organization Expense 60,000


Ordinary Shares 60,000

You might also like