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    Memorandum Method Vs Journal Entry Method

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    Louremie Delos Reyes Malabayabas
    The document describes the share capital transactions of Entity A during the current period using both the memorandum method and journal entry method of accounting. It outlines Entity A's authorized share capital, shares subscribed at 25% of authorization with 25% payment, receipt of full payment for 10,000 shares, and subscription of additional shares. The requirements are to provide journal entries for each method and prepare Entity A's shareholders' equity as of the end of the period.

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    Download as XLSX, PDF, TXT or read online from Scribd

    Memorandum Method Vs Journal Entry Method

    Uploaded by

    Louremie Delos Reyes Malabayabas
    3K views4 pages
    The document describes the share capital transactions of Entity A during the current period using both the memorandum method and journal entry method of accounting. It outlines Entity A's authorized share capital, shares subscribed at 25% of authorization with 25% payment, receipt of full payment for 10,000 shares, and subscription of additional shares. The requirements are to provide journal entries for each method and prepare Entity A's shareholders' equity as of the end of the period.

    Original Title

    Memorandum-Method-Vs.-Journal-Entry-Method (3)

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    The document describes the share capital transactions of Entity A during the current period using both the memorandum method and journal entry method of accounting. It outlines Entity A's authorized share capital, shares subscribed at 25% of authorization with 25% payment, receipt of full payment for 10,000 shares, and subscription of additional shares. The requirements are to provide journal entries for each method and prepare Entity A's shareholders' equity as of the end of the period.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    3K views4 pages

    Memorandum Method Vs Journal Entry Method

    Uploaded by

    Louremie Delos Reyes Malabayabas
    The document describes the share capital transactions of Entity A during the current period using both the memorandum method and journal entry method of accounting. It outlines Entity A's authorized share capital, shares subscribed at 25% of authorization with 25% payment, receipt of full payment for 10,000 shares, and subscription of additional shares. The requirements are to provide journal entries for each method and prepare Entity A's shareholders' equity as of the end of the period.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 4

    Memorandum method vs Journal Entry method

    1. Entity A was incorporated at the start of the current period. The following were
    Entity A's share capital transactions during the year:

    a. The SEC approved Entity A's authorized capitalization of P3,000,0000 divided into
    100,000 shares with par value of P30 per share.
    Memorandum Method Vs Journal Entry Method
    Memo Entry - The authorized capitalization Unissued share capital
    is P3,000,000 divided into P100,000 Authorized share capital
    shares with par value per share of P30

    b. Twenty-Five percent (25%) of the authorized capitalization was subscribed at par value
    and twenty-five percent (25%) of the subciption price was paid on subcription date.
    Memorandum Method Vs
    Cash (3M*25%*25%) P187,500
    Subsription receivable P562,500
    Subsription share capital (3M*25%) P750,000

    c. Received full paymet for 10,000 subscribed shares and issued the related share certifictes.
    Memorandum Method Vs
    Cash P225,000
    Subsription receivable P225,000

    Subsription share capital P300,000


    Share capital P300,000

    d. Received cash subscription for 15,000 additional shares at a subcription price of P40 per share
    Memorandum Method Vs Journal Entry Method

    e. Received subscription for 10,000 additional shares at a subcription price of P50 per share
    Memorandum Method Vs Journal Entry Method

    f. collected the full payment on the subscription in e' above and issued the related share certificate
    Memorandum Method Vs Journal Entry Method

    Requirements:

    a. provide the journal entries under (1) memorandum method and (2) Journal Entry Method.
    b. Prepare the shareholder's equity of Entity A as of the end of the period.
    Journal Entry Method
    Unissued share capital P3,000,000
    Authorized share capital P3,000,000

    Journal Entry Method


    Cash (3M*25%*25%) P187,500
    Subsription receivable P562,500
    Subsription share capital (3M*25%) P750,000

    Journal Entry Method


    Cash P225,000 Subsription price of P10,000 shares (P10K*
    Subsription receivable P225,000 Portion already paid (P300K*25%)
    Balance collected
    Subsription share capital P300,000
    Share capital P300,000

    Journal Entry Method

    Journal Entry Method

    Journal Entry Method


    P10,000 shares (P10K* P300,000
    (P300K*25%) (P75,000)
    P225,000

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