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TWO METHODS OF ACCOUNTING FOR SHARE CAPITAL

TRANSACTIONS JOURNAL ENTRY METHOD MEMORANDUM ENTRY METHOD


X Corporation is authorized to issue share capital of P100,000 Unissued Share Capital 100,000 The company was authorized to issue
divided into 1,000 shares with a par value of P100 per share Authorized Share Capital 100,000 share capital divided into 1,000 share
value of P100 per share

Subscriptions for 100 shares at par value Subscriptions Receivable 10,000 Subscritions Receivable
Subscribed Share Capital 10,000 Subscribed Share Capital

Collections of subscriptions in full Cash 10,000 Cash


Subscriptions Receivable 10,000 Subscriptions Receivable

Issuance of stock certificates upon full payment of Subscribed Share Capital 10,000 Subscribed Share Capital
subscriptions Unissued Share Capital 10,000 Share Capital

Issuance of 50 shares at par for cash Cash 5,000 Cash


Unissued Share Capital 5,000 Share Capital

Subscriptions for 100 shares at P102 per share Subscriptions Receivable 10,200 Subscriptions Receivable
Subscribed Share Capital 10,000 Subscribed Share Capital
Share Premium 200 Share Premium

Issuance of 100 shares at P102 per share Cash 10,200 Cash


Unissued Share Capital 10,000 Share Capital
Share Premium 200 Share Premium

Issuance of 500 shares in exchange for land. FMV of the land Land 50,000 Land
at the time of exhange is P50,000. Unissued Share Capital 50,000 Share Capital

Issuance of 20 shares in exchange for services of one of the Pre Operating Expenses 2,000 Pre Operating Expenses
incorporators. FMV of the services is P2,000. Unissued Share Capital 2,000 Share Capital
The company was authorized to issue P100,000
share capital divided into 1,000 shares with a par

10,000
10,000

10,000
10,000

10,000
10,000

5,000
5,000

10,200
10,000
200

10,200
10,000
200

50,000
50,000

2,000
2,000
TWO METHODS OF ACCOUNTING FOR SHARE CAPITAL- pro forma entries
2 CLASSES OF STOCKS

TRANSACTIONS JOURNAL ENTRY METHOD MEMORANDUM ENTRY METHOD


Unissued Preference Shares Preference Shares Ordinary Shares
AUTHORIZATION Unissued Ordinary Shares authorized to issue….. authorize to issue
Authorized Preference Shares
Authorized Ordinary Shares

SUBSCRIPTIONS ABOVE PAR - ORDINARY Subscriptions Receivable-Ordinary Subscriptions Receivable-Ordinary


Subscribed Ordinary Shares Subscribed Ordinary Shares
Share Premium- Ordinary Share Premium- Ordinary

PREFERENCE Subscription Receivable-Preference Subscription Receivable-Preference


Subscribed Preference Shares Subscribed Preference Shares
Share Premium - Preference Share Premium - Preference

COLLECTION Cash Cash


Subsrciption Receivable - Preference Subsrciption Receivable - Preference
Subsrciption Receivable - Ordinary Subsrciption Receivable - Ordinary

ISSUANCE OF STOCK CERTIFICATES Subscribed Ordinary Shares Subscribed Ordinary Shares


Subscribed Prererence Shares Subscribed Preference Shares
Unissued Ordinary Shares Ordinary Shares
Unissued Preference Shares Preference Shares
ANDUM ENTRY METHOD
Ordinary Shares
authorize to issue

ptions Receivable-Ordinary
Subscribed Ordinary Shares

ption Receivable-Preference
Subscribed Preference Shares
Share Premium - Preference

Subsrciption Receivable - Preference


Subsrciption Receivable - Ordinary
TREASURY SHARE TRANSACTIONS- pro-forma entries
PURCHASE Treasury Share - Ordinary
Treasury Share - Preference
Cash

SALE ABOVE COST- Ordinary Cash


Treasury Share- Ordinary
Ordinary Share Premium- Treasury

SALE ABOVE COST - Preference Cash


Treasury Share - Preference
Preference Share Premium -Treasury

SHARE/STOCK DIVIDENDS
DECLARATION - Ordinary Retained Earnings
Shares Distributable- Ordinary
Ordinary Share Premium- Share Dividends

DECLARATION - Preference Retained Earnings


Shares Distributable - Preference
Preference Share Premium- Share Dividends

ISSUANCE OF SHARE DIVIDENDS- Ordinary Shares Distributable - Ordinary


Ordinary Shares

ISSUANCE OF SHARE DIVIDENDS - Preference Shares Distributable - Preference


Preference Shares