Diese Präsentation wurde erfolgreich gemeldet.

05 corporate nature and formation part ii

1

Teilen

Nächste SlideShare
corporation
corporation
Wird geladen in …3
×
1 von 15
1 von 15

Weitere Verwandte Inhalte

Ähnliche Bücher

Kostenlos mit einer 14-tägigen Testversion von Scribd

Alle anzeigen

Ähnliche Hörbücher

Kostenlos mit einer 14-tägigen Testversion von Scribd

Alle anzeigen

05 corporate nature and formation part ii

  1. 1. Copyright © by Houghton Miffin Company. All rights reserved. 1
  2. 2. Authorized Share Capital Authorized Shares • the maximum number of shares that ordinary and preference share may issue Authorized Share Capital • when the authorized share is being multiplied by PAR VALUE or STATED VALUE
  3. 3. Memorandum Entry and Journal Entry Methods Two Methods in Accounting for Share Capital: • Memorandum Entry Method • Journal Entry Method
  4. 4. Memorandum Entry and Journal Entry Methods Transactions MEMO ENTRY METHOD JOURNAL ENTRY METHOD Authorized to issue 8% of Preference shares, 5,000 shares at P100 par and 20,000 shares at P50 par value share 8% Preference Share Capital ___________________________________ Authorized to issue 8% preference share 5,000 with par value, P100 Ordinary Share Capital ___________________________________ Authorized to issue 20,000 share with par value, P50 Unissued Pref. Share 500,000 Authorized Pref. Share 500,000 Unissued Ord. Share1,000,000 Authorize Ord. Share 1,000,000 25% of Authorized Share Capital for both Pref. and Ordinary are subscribed Subscription Receivable-P 125T Subscription Receivable-O 250T Subscribed Share Capital-P 125T Subscribed Share Capital-O 250T Subscription Receivable-P 125T Subscription Receivable-O 250T Subscribed Share Capital-P 125T Subscribed Share Capital-O 250T 25% of Subscribed Share Capital was Paid-up Cash 93,750 Subscription Receivable-P 31,250 Subscription Receivable-O 62,500 Cash 93,750 Subscription Receivable-P 31,250 Subscription Receivable-O 62,500 Full payment of subscription Cash 281,250 Subscription Receivable-P 93,750 Subscription Receivable-O 164,500 Cash 281,250 Subscription Receivable-P 93,750 Subscription Receivable-O 164,500 Issuance of Shares Subscribed Share Capital-P 125T Subscribed Share Capital-O 250T Share Capital- P 125T Share Capital- O 250T Subscribed Share Capital-P 125T Subscribed Share Capital-O 250T Unissued Share Capital- P 125T Unissued Share Capital- O 250T
  5. 5. ACCOUNTING FOR PAR VALUE SHARES (Subscription Basis) Illustration: SheRock Corporation has authorized share capital of P100,000 at P50 par value per share. Case 1- at Par Value (100 shares were subscribed at par, 30% down payment and the remaining were paid in full) Upon Subscription: Subscription Rec’l 5,000 Subscribed Share Capital 5,000 Upon Partial Payment: Cash 1,500 Subscription Rec’l 1,500 Upon Full Payment: Cash 3,500 Subscription Rec’l 3,500 Upon Issuance of Certificate Subscribed Share Capital 5,000 Share Capital 5,000
  6. 6. ACCOUNTING FOR PAR VALUE SHARES (Subscription Basis) Illustration: SheRock Corporation has authorized share capital of P100,000 at P50 par value per share. Case 2- Above Par Value (100 shares were subscribed at P60 per share, 30% down payment and the remaining were paid in full) Upon Subscription: Subscription Rec’l 6,000 Subscribed Share Capital 5,000 Additional Paid-in 1,000 Upon Partial Payment: Cash 1,800 Subscription Rec’l 1,800 Upon Full Payment: Cash 4,200 Subscription Rec’l 4,200 Upon Issuance of Certificate Subscribed Share Capital 5,000 Share Capital 5,000
  7. 7. ACCOUNTING FOR PAR VALUE SHARES (Subscription Basis) Illustration: SheRock Corporation has authorized share capital of P100,000 at P50 par value per share. Case 3- Below Par Value (100 shares were subscribed at P40 per share, 30% down payment and the remaining were paid in full) Upon Subscription: Subscription Rec’l 4,000 Discount on Share Capital 1,000 Subscribed Share Capital 5,000 Upon Partial Payment: Cash 1,200 Subscription Rec’l 1,200 Upon Full Payment: Cash 2,800 Subscription Rec’l 2,800 Upon Issuance of Certificate Subscribed Share Capital 5,000 Share Capital 5,000
  8. 8. ACCOUNTING FOR PAR VALUE SHARES (Subscription Basis) Illustration: SheRock Corporation has authorized share capital of P100,000 at P50 par value per share. Case 4- Sold for Cash At Par Value Cash 5,000 Share Capital 5,000 Above Par Value (P60 per share) Cash 6,000 Share Capital 5,000 Additional Paid-In 1,000 Below Par Value (P40 per share) Cash 4,000 Discount on Share Capital 1,000 Share Capital 5,000
  9. 9. Accounting on Stock Issued for Non-cash Consideration Rules: 1.If issued for tangible, intangible properties and services a) FMV of Non-Cash consideration received b) FMV of the Share Capital issued c) Par Value of the share capital 2. If issued for outstanding liability a) Recorded at the amount equal to the liability set off. 3. If issued in exchange of other equity securities a) FMV of equity received b) FMV of share capital issued c) Par Value of the share capital issued
  10. 10. Accounting on Stock Issued for Non-cash Consideration Illustration: 1. SheRock Corp. issued 1,000 shares with par value P100 per share in exchange of land with FMV of 130,000. The FMV per share is P110. Entry: Land 130,000 Share Capital 100,000 APIC-Excess par 30,000 2. SheRock Corp. issued 1,000 shares with par value P100 per share. The outstanding obligation amounts to 120,000. Entry: Loans Payable 120,000 Share Capital 100,000 APIC 20,000
  11. 11. Share Issuance Expense Includes the following: 1. Professional Fees- Accountant’s and attorney’s fees 2. Underwriting fees or Commission 3. Cost of printing share certificates 4. Filing fees with SEC 5. Cost of advertising the issuance 6. Doc stamp tax
  12. 12. Accounting for No Par Value Shares Same treatment as with Par Value shares, just replace the account titles to “Stated Value” Ex: Additional Paid-in Capital in Excess of Stated Value
  13. 13. Accounting for Delinquent Subscription Delinquent shares • Subscription that was not paid in full • No collection was made after 30 days from the date of subscription. Illustration: Pao subscribes 100 ordinary shares at par value of P10 per share in SheRock Corp and made a down payment equal to 30% of the subscription
  14. 14. Accounting for Delinquent Subscription Illustration: Pao subscribes 100 ordinary shares at par value of P10 per share in SheRock Corp and made a down payment equal to 30% of the subscription. Entry: Subscription Receivable- Ordinary 1,000 Subscribed Share Cap-Ordinary 1,000 Cash 300 Subscription Receivable 300
  15. 15. Accounting for Delinquent Subscription Illustration: Pao subscribes 100 ordinary shares at par value of P10 per share in SheRock Corp and made a down payment equal to 30% of the subscription. Entry: Subscription Receivable- Ordinary 1,000 Subscribed Share Cap-Ordinary 1,000 Cash 300 Subscription Receivable 300

×