AUDIT OF EQUITY

Overview
• Auditing equity is usually one of the easiest parts of an audit. For
some equity accounts, you agree the year-end balances to the prior
year ending balance, and you’re done. For instance paid-in-capital
seldom changes. Often, the only changes in equity are from current
year profits and owner distributions. And testing those equity
additions and reductions in equity takes only minutes.

• Nevertheless, auditing equity can be challenging, especially for

businesses that desire to attract investors. Such companies offer
complicated equity instruments. 
Financial Reporting
Source document/transactions PFRS/PAS Financial
Statements

Auditing
Financial Statements Philippine Standard on Auditing
Source document/transactions
Variation/ Components of Equity
• Common stock
• Paid in capital
• Preferred stock
• Treasury stock
• Retained Earnings
• Non-controlling interests
• Members’ equity (for an LLC)
• Net assets (for a nonprofit)
• Net position (for a government)
Audit assertions for Equity
1. Existence - Share capital reported on the balance sheet really exists at the
reporting date.
2. Completeness - All share capital transactions that should have been
recorded have been recorded.
3. Valuation - Share capital balances are valued in accordance with applicable
accounting standards.
4. Presentataion and disclosure - Sufficient information about share capital
have been properly disclosed in accordance with applicable accounting
standards.
Equity Walkthroughs
Early in your audit, perform a walkthrough of equity to see if there are any
control weaknesses. As you perform this risk assessment procedure, what
questions should you ask? What should you observe? What documents should
you inspect? 

Sample Auditing Equity Questions

1. What types of equity does the entity have? What are the rights of each class?
2. How many shares are authorized? How many shares have been issued?
3. Does the company have any convertible debt?
4. Has the company declared and paid dividends?
5. Are there any state laws restricting distributions?
Sample Auditing Equity Questions
6. Does the company have accumulated other comprehensive
income?
7. Inspect ownership documents such as stock certificates.
8. Read the minutes to determine if any new equity has been issued.
9. Is the entity attempting to raise additional capital?
10. Has the company sold any additional equity ownership?
11. Is there a noncontrolling interest in the company?
12. Does the company have stock compensation plan?
13. For a nonprofit, are there any restricted donations?
Sample Audit Procedure
a. Existence and Completeness assertions in the audit of share capital
1. Obtain the client’s articles of incorporation, bylaws and board meeting
minutes
2. Agree the authorized share capital to the supporting documents above
3. Reconcile the authorized share capital with the general ledger
Sample Audit Procedure
b.  Valuation assertion in the audit of share capital
1. Obtain the client’s board meeting minutes
2. Agree share transactions records (either our own records or independent
agent) to the board meeting minutes e.g. for the evidence of share issue
3. If the share issue is in the form of cash,
• trace the proceed from the share issue to the cash receipts journal
• vouch the share issue transactions to supporting documents to make sure that they are
properly and accurately recorded in capital accounts.
4. If the share issue is in the form of non-cash transactions, make sure that the
client has properly followed an applicable accounting standard, when recording
the share issue.
Common Equity Control Deficiencies
In smaller entities, it is common to have the following control deficiencies:
1. One person performs two or more of the following:
• Approves the sale of equity interests,
• Enters the new equity in the accounting system, 
• Deposits funds from the sale of the equity instruments

2. Accounting personnel lack knowledge regarding equity transactions

Common Equity Work Papers
1. My equity work papers normally include the following:
2. An understanding of equity-related internal controls
3. Documentation of any equity internal control deficiencies
4. Risk assessment of equity at the assertion level
5. Equity audit program
6. A copy of (sample) equity instruments
7. Minutes reflecting the approval of new equity or the retirement of existing
equity
8. A summary of equity activity (beginning balances plus new equity less equity
distributions and ending balance)
SHAREHOLDERS
EQUITY
INTRODUCTION
The 3 forms of business organization are single proprietorship, partnership and
corporation.
In a single proprietorship, the owner's claim against the assets is called capital
or owner's equity.
In a partnership, the partners' claim against the assets is called partners' capital
or partners' equity.
In a corporation, the owners' claim against the assets is called share. holders'
equity or stockholders' equity.

However, the term "equity" may simply be used for all the business
organizations.
Actually, accounting records for these business organizations are practically the
same except the accounting for the capital accounts.
In a single proprietorship and partnership, the investment of
the owner or owners and the changes therein resulting from
net income or loss from operations are recorded in the capital
accounts.

In a corporation, distinction is made between invested capital

and earnings or losses accumulated in the business.

This distinction and other matters affecting the shareholders‘

equity will be discussed in this chapter.
Concept of a corporation
A corporation is an artificial being created by operation of
law, having the right of succession, and the powers,
attributes, and properties expressly authorized by law or
incident to its existence.

A corporation is a legal or juridical person with a personality

separate and apart from the individual members or
shareholders who, as natural persons, are merged in one
corporate body.
Organization of a corporation
A corporation is created by operation of law. This means that
a corporation cannot come into existence by mere agreement
of parties as in the case of a business partnership. A
corporation requires the authority and grant from the state.

In the Philippines, the general law which governs the creation

of private corporations is the Corporation Code.
Private corporations owned or controlled by the government
or any subdivision or instrumentality thereof are created by
special laws.
Legal requirement
The Corporation Code provides that five or more persons, not
exceeding fifteen, a majority of whom are residents of the
Philippines, may form a private corporation for any lawful
purpose or purposes by filing with the Securities and
Exchange Commission the articles of incorporation, duly
executed and acknowledged before a notary public.
Contents of Articles of Incorporation
a. The name of the corporation.
b. The purpose or purposes for which the corporation is
formed.
c. The place where the principal office of the corporation is to
be established or located, which place must be within the
Philippines.
d. The term for which the corporation is to exist not exceeding
50 years.
e. The names and residences of the incorporators.
f. The names and addresses of the incorporating directors who
must not be less than five nor more than fifteen.
Contents of Articles of Incorporation
g. The amount of share capital, its par value, and the number
of shares into which it is divided. If the share has no par value,
the articles need state only the number of shares but the fact
that the share is without par shall be stated therein.
h. The amount of share capital or the number of no par
shares actually subscribed, including the names and
residences of the subscribers with an indication of the
amount or number of no par shares subscribed and paid by
each.
After the filing of the articles of incorporation, the corporation
commences to have judicial personality and legal existence
only from the moment the Securities and Exchange
Commission issues to the incorporators a certificate of
incorporation.

Such certificate is a final determination of the corporation's

right to do business.

The issuance of the certificate of incorporation calls the

corporation to being but it is not yet ready to do business
until it is organized.
The corporation must formally organize and commence
operations within two years from the date of its
incorporation. Otherwise, its corporate powers shall cease.

Formal organization requires the adoption of by-laws and

the election of officers by the board of directors pursuant to
the by-laws, and taking such steps as are necessary to enable
the corporation to transact the legitimate purpose for which it
was created.
By-laws
By-laws may be defined as the rules of action adopted by the
corporation for its internal government and for the
government of its officers, shareholders, or members.

The by-laws shall be adopted and filed with the Securities

and Exchange Commission within one month from the date
of incorporation.

Failure to do so shall render the corporation liable for the

revocation of its registration.
Contents of by-laws
a. The time, place, manner of calling and rules for meetings of
shareholders and directors. The place of shareholders‘ meeting
must be the principal place of business.
b. The number, qualifications, duties, powers, and length of office
of directors. A director must be a registered owner of at least one
share of stock, and majority of the directors must be residents of
the Philippines.
c. The appointment, duties, powers, compensation and length of
office of corporate officers other than directors.
d. The manner of issuing share certificates.
e. The method of amending by-laws.
f. Any other rules governing the acts of officers and directors.
Pre-incorporation subscription requirement
The Corporation Code provides that the Securities and Exchange
Commission shall not register any stock corporation unless
25% of its authorized number of shares has
been subscribed, and at least 25% of the subscription has been
paid.
However, in no case, shall the paid in capital be less than P5,000.

For example, the authorized share capital is P4,000,000 divided

into 40,000 shares with par value of P100 per share.
The subscribed share capital must be P1,000,000 which is 25% of
P4,000,000 and the amount paid in must be P250,000 which is
25% of P1,000,000.
Components of corporation
a. Corporators are those who compose the corporation
whether shareholders or members or both.
b. Incorporators are those corporators mentioned in the
articles of incorporation as originally forming and
composing the corporation.
c. Shareholders or stockholders are owners of shares in a
stock corporation.
Shareholders may be natural or artificial persons but only
natural persons can be incorporators.
d. Members are corporators of a nonstock corporation.
Books and records of a corporation
a. Minutes book contains the Minutes of the meetings of
the directors and shareholders.
b. Stock and transfer book is a record of the names of
shareholders, installments paid and unpaid by shareholders
and dates of payment, any transfer of share and dates
thereof, by whom and to whom made.
c. Books of accounts represent the record of all business
transactions. The books of accounts include normally the
journal and the ledger.
d. Subscription book is a book of printed blank subscription.
Books and records of a corporation
e. Shareholders' ledger is a subsidiary for the share capital
issued reporting the number of shares issued to each
shareholder.
f. Subscribers' ledger is a subsidiary for the subscriptions
receivable account reporting the individual subscription of
the subscribers.
g. Share certificate book is a book of printed blank share
certificates.
Organization Cost
As the name suggests, the term "organization cost“ represents
costs incurred in forming or organizing a corporation
Specifically, organization costs include:
a. Legal fees in connection with the incorporation, such as
drafting of articles of incorporation and by-laws and
corporation registration
b. Incorporation fees
c. Share issuance costs, such as printing of stock certificates,
cost of stock and transfer book, seal of corporation,
underwriting and promotional fees, accounting and legal fees
related to share issuance.
PAS 38, paragraph 69, provides that start up costs which
include legal and secretarial costs in establishing a legal
entity shall be recognized as expense when incurred.

Accordingly, it is now clear-cut that organization cost shall

be expensed immediately with the exception of share
issuance costs
Shareholders' equity
Shareholders' equity or stockholders' equity is the residual
interest of owners in the net assets of a corporation
measured by the excess of assets over liabilities.

Generally, the elements constituting shareholders' equity

with their equivalent IFRS term are:
Philippine term IAS term
Capital stock Share capital
Subscribed capital stock Subscribed share capital
Common stock Ordinary share capital
Preferred stock Preference share capital
Additional paid in capital Share premium
Retained earnings (deficit) Accumulated profits
(losses)
Retained earnings appropriated Appropriation reserve
Revaluation surplus Revaluation reserve
Treasury stock Treasury share
Additional paid in capital or "share premium" is the portion
of the paid in capital representing excess over the par or
stated value. Broadly, the common sources of share
premium are:
a. Excess over par value or stated value
b. Resale of treasury shares at more than cost
c. Donated capital
d. Issuance of share warrants
e. Distribution of share dividends
f. Quasi-reorganization and recapitalization
Capital stock
The term "capital stock" or "share capital" is the amount
fixed in the articles of incorporation to be subscribed and
paid in or secured to be paid in by the shareholders of the
corporation, either in money or property or services, at the
organization of the corporation, or afterwards and upon
Which the corporation is to conduct its operations.
Actually, the amount fixed in the articles of incorporation is
called the authorized share capital.
The share capital is divided into shares evidenced by a share
certificate.
A share represents the interest or right of a shareholder in
the corporation. The four rights of a shareholder are:
a. To share in the earnings of the corporation.
b. To vote in the election of directors and in the
determination of certain corporate policies.
c. To subscribe for additional share issues — This is the right
of preemption or stock right.
d. To share in the net assets of the corporation upon
liquidation.
A share certificate is the instrument or document that
evidences the ownership of a share.

As a general rule, a share certificate is issued only when the

subscription is fully paid.

The share capital may be par value share or no-par value

share. A par value share is one with specific value fixed in
the articles of incorporation and appearing on the share
certificate. The purpose of the par value is to fix the
minimum issue price of the share.
A par value share is one with specific value fixed in the
articles of incorporation and appearing on the share
certificate. The purpose of the par value is to fix the
minimum issue price of the share.

A no-par share is one without any value appearing on the

face of the share certificate.
A share is simply called "no par" because it has no par value
appearing on the face of the share certificate. But a no-par
share has always an "issued value" or "stated value" based
on the consideration for which it is issued.

The minimum consideration or issue price for no-par share

as provided for in the Corporation Code is P5. In other
words, a no-par share cannot be issued for less than P5.
Ordinary share capital
If there is only one class of share capital, it necessarily is
ordinary share.
Ordinary share is so called because the ordinary shareholders
have the same rights and privileges.
The ordinary shareholders enjoy no preference over each other.

Generally, the ordinary share gives the owner the right to vote,
to share in the income, and in the event of liquidation, to share
in all assets after satisfying creditors' and preference
shareholders' claims.
The ordinary shareholders have no fixed or specific return
on investment.

Their financial reward is dependent on the operations of

the entity.
If the entity is exceptionally profitable, the holdings of
ordinary shareholders will become more valuable.
Conversely, if an entity suffers losses, the value of the
ordinary shareholders' equity will be reduced as fewer
assets are available to satisfy residual claims.
Preference share capital
Preference share is so called because of the preferences granted
to the shareholders.

The preferences usually pertain to the preference shareholders'

claims on dividends and net assets in the event of liquidation.
The preference shareholders have only a limited or fixed
return on investment.

For example, a holder of P100 par value, 12% preference share is

entitled to an annual dividend, if declared, of 12% of P100 or
P12.
Legal capital
Legal capital is that portion of the paid in capital arising
from issuance of share capital which cannot be returned to
the shareholders in any form during the lifetime of the
corporation.
The amount of legal capital is determined as follows:
a. In the case of par value share, legal capital is the
aggregate par value of the shares issued and subscribed.
b. In the case of no-par value share, legal capital is the total
consideration received from shareholders including the
excess over the stated value.
Trust fund doctrine
The trust fund doctrine holds that the share capital of a
corporation is considered as trust fund for the protection of
creditors.

Consequently, it is illegal to return such legal capital to

shareholders during the lifetime of the corporation.
However, the corporation can pay dividends to shareholders
but limited only to the retained earnings balance.

Accordingly, it is illegal to pay dividends if the entity has a

deficit.
Accounting for share capital
a. Memorandum method — No entry* is made to record
the authorized share capital. Only a memorandum is made
for the total authorized share capital. When share capital
is issued, it is credited to the share capital account.
b. Journal entry method — The authorization to issue share
capital is recorded by debiting unissued share capital and
crediting authorized share capital. When share capital is
issued, it is credited to the unissued share capital account.
Statement presentation (Memorandum Method)
If a statement of financial position is prepared, the share
capital would be shown under shareholders' equity.
Share capital, P100 par, 40,000 shares authorized,
11,000 shares issued 1,100,000
Subscribed share capital, 4,000 shares 400,000
Subscription receivable (300,000)
Shareholders' equity 1,200,000
Statement presentation (Journal entry method )
Authorized share capital, P100 par, 40,000 shares 4,000,000
Unissued share capital, 29,000 shares (2,900,000)
Issued share capital 1,100,000
Subscribed share capital, 4,000 shares 400,000
Subscription receivable (300,000)
Shareholders' equity 1,200,000
Issuance of share capital
The Corporation Code provides that "a share shall not be
issued for a consideration less than the par or stated value
thereof."
The law further provides that shares without par value
cannot be issued for less than P5. Thus, in the Philippines,
the no-par share must have a stated value of at least P5.
When shares with par value are sold, the proceeds shall be
credited to the share capital account to the extent of the par
value, with any excess being reflected as share premium.
Share issued at discount
When shares are sold at a price which is below par or stated
value, they are said to be issued at a discount.

Our Corporation Code prohibits the issue of share at a

discount. Thus, when a share is sold at a discount, the
discount is not considered a loss to the issuing corporation
but the shareholder is held liable therefor.
Note that the issue itself is not void but the agreement that
the share shall be paid for less than par value or stated
value is illegal and cannot be enforced.

The issue of the share therefore is not canceled but the

shareholder must pay for the discount. This is called the
discount liability of the shareholder.

Since a discount is an investment deficiency, it should be

accounted for separately.
For example, if 10,000 shares of P100 par value are sold for
P800,000 cash, the journal entry is:
Cash 800,000
Discount on share capital 200,000
Share capital 1,000,000

The account "discount on share capital" is a deduction from

total shareholders' equity.
It should be pointed out that the prohibition to issue share
at a discount refers to the original issue of a share but not
to a subsequent transfer of such share by the corporation.

Hence, treasury shares may be sold or reissued for less

than the par value or stated value without violating the
provision of the law.
Issuance of share capital for noncash consideration The
Corporation Code provides that "where the consideration
for the issuance of share capital is other than actual cash or
consists of property such as patent or copyright, the
valuation thereof shall be initially determined by the
incorporators or the board of directors subject to the
approval of the Securities and Exchange Commission".

In other words, reference is made to the fair value of the

property received, which must be determined by the
incorporators or board of directors, subject to the approval
of the Securities and Exchange Commission.
PFRS 2, paragraph 10, provides that for equity-settled
share- based payment. transactions, the entity shall
measure the goods and services received and the
corresponding increase in equity directly at the fair value of
the goods and services received.

However, if the entity cannot estimate reliably the fair value

of the goods and services received, the entity shall measure
their value and the corresponding increase in equity
indirectly by reference to the fair value of the equity
instruments issued.
Accordingly, if share capital is issued for noncash
consideration such as tangible property, intangible property
and services, the share capital is recorded at an amount
equal to the following in the order of priority:
a. Fair value of the noncash consideration received
b. Fair value of the shares issued
c. Par value of the shares issued
Issuance of share capital for services
Shares may be issued for services as long as the services are
already rendered.

In conformity with the legal provision and PFRS 2, if shares

are issued for services, the shares shall be recorded at the
fair value of such services or fair value of the shares issued,
whichever is reliably determinable.
Share issuance costs
Share issuance costs are direct costs to sell share capital
which normally include legal fees, CPA fees, underwriting
fees, commissions, cost of printing certificates, documentary
stamps, filing fees with SEC and cost of advertising and
promotion. or newspaper publication fee. PAS 32, paragraph
37, provides that transaction costs that are directly
attributable to the issuance of new shares shall
be deducted from equity, net of any related income tax
benefit.
In other words, share issuance costs shall be debited to
share premium arising from the share issuance.
If the share premium is insufficient to absorb such expenses,
the Philippine Interpretations Committee or PIC concluded
that the excess shall be debited to "share issuance costs" to
be reported as a contra equity account as a deduction from
the following in the order of priority:
a. Share premium from previous share issuance
b. Retained earnings
Costs of public offering of shares
The Philippine Interpretations Committee concluded that
"costs that relate to stock market listing, or otherwise are not
incremental costs directly attributable to the issuance of new
shares, shall be recorded as expense in the income statement.
The costs of listing shares are not considered as costs of an
"equity transaction" since no equity instrument has been
issued. Therefore, such costs are recognized immediately as an
expense when incurred.
Costs of listing shares include the following:
a. Road show presentation
b. Public relations consultant's fees
Joint costs
PAS 32, paragraph 38, requires that transaction costs that
relate jointly to the concurrent listing and issuance of new
shares, and listing of old existing shares shall be allocated
between the newly issued and listed shares, and the newly
listed old existing shares.
However, PAS 32 provides no further guidance as to what
basis of allocation should be followed.
The Philippine Interpretations Committee concluded that the
joint costs shall be allocated pro-rata on the basis of
outstanding newly issued and listed shares and outstanding
newly listed old existing shares.
Examples of joint costs include the following:
a. Audit and other professional advice relating to prospectus
b. Opinion of counsel
c. Tax opinion
d. Fairness opinion and Valuation report
e. Prospectus design and printing
Illustration
An entity undertakes an initial public offering or IPO for the
listing and issuance of 700,000 new shares and listing of
300,000 old existing shares.
The entity incurred the following costs:
Documentary stamp tax 25,000
Fairness opinion and valuation report 125,000
Tax opinion 100,000
Newspaper publication 200,000
Listing fee 300,000
Other joint costs 275,000
Cost of public offering - Listing Fee P300,000 (Expense as Immediately)

Share issuance cost (deduction to equity)

Documentary stamp tax 25,000
Newspaper publication 200,000
Total 225,000

Joint costs ( allocated treated as expense & deduction to equity)

Fairness opinion and valuation report 125,000
Tax opinion 100,000
Other joint costs 275,000
Total joint costs 500,000
The share issuance costs shall be recorded as follows:
a. If the new shares are issued at more than par:
Share premium 225,000
Cash 225,000
b. If the new shares are issued at par:
Share issuance costs 225,000
Cash 225,000
Again, the share issuance costs shall be reported in the statement
of financial as a contra equity account of the following:
a. Share premium from previous share issuance
b. Retained earnings
Allocation of joint costs
Outstanding Fraction
Allocated
Newly issued and listed shares 700,000 7/10 350,000
Newly listed old existing shares 300,000 3/10 150,000
1,000,000 500,000

Journal entry
Share premium 350,000
Stock listing fee 150,000
Cash 500,000
Watered share
Watered share is share capital issued for inadequate or
insufficient consideration. The consideration received is
less than par or stated value, but the share capital is
issued as fully paid.

If the share capital is watered, asset is overstated and

capital is correspondingly overstated.
For example, land with fair value of at P800,000 is received for
10,000 shares of P100 par value. To create a water in the share
capital, the issuance of 10,000 shares is recorded as fully paid as
follows:
Land 1,000,000
Share capital 1,000,000

Needless to say, the land is overvalued and the share capital

is also overstated.
As mentioned earlier, it is illegal to issue a share for less than
the par or stated value. Thus in the example, the shareholder
has a discount liability of P200,000. To correct the accounts,
the journal entry is as follows:
Discount on share capital 200,000
Land 200,000
Secret reserve
The term secret reserve is the reverse of watered share.
Secret reserve arises when asset is understated or liability is
overstated with a consequent understatement of capital.
Secret reserve usually arises from the following:
a. Excessive provision for depreciation, depletion,
amortization and doubtful accounts.
b. Excessive write-down of receivables, inventories and
investments.
c. Capital expenditures are recorded as outright expense.
d. Fictitious liabilities are recorded.
Delinquent subscription
The Corporation Code provides that the board of directors
may at any time declare due and payable unpaid
subscriptions.

This official declaration is called a call usually expressed in the

form of a board resolution stating the date fixed for payment
of the unpaid subscriptions.

If the shareholder does not pay on the date fixed, the

shareholder is declared delinquent and the delinquent share
will be sold at public auction.
At the public auction, so many delinquent shares as may be
necessary to cover the unpaid subscription, interest accrued on
the subscription, expenses of advertisement and other costs of
sale will be sold to the highest bidder.
Who is the highest bidder?
The highest bidder is the person who is willing to pay the "offer
price" of the delinquent shares for the smallest number of
shares.
The offer price normally includes the following:
a. Balance due on the subscription
b. Interest accrued on the subscription due
c. Expenses of advertising and other costs of sale
Illustration
X subscribed for 10,000 shares at par P100, paying P600,000 as
initial payment. The balance of the subscription was called and X
failed to pay. Consequently, the subscription was declared
delinquent.
The offer price is P450,000 including the balance due on the
subscription, interest and costs of sale.
There are three bidders who are willing to pay the offer price,
namely:
A 4,500 shares
B 5,000 shares
C 6,000 shares
Evidently, A is the highest bidder. Thus, all the 10,000 shares
shall be deemed fully paid. Accordingly, A gets 4,500 shares,
and X, the original subscriber, gets 5,500 shares.
The question is suppose there are no bidders?
In such a case, the corporation may purchase for itself the
delinquent shares. The delinquent subscriber is then released
from liability with regard to the subscription which is deemed
fully paid.

Of course, the purchase by the corporation must be backed

up by sufficient retained earnings in view of the trust fund
doctrine.

The purchase made by the corporation is tantamount to

acquisition of treasury shares.
Journal entries
1. X subscribes for 10,000 shares at par P100.
Subscription receivable 1,000,000
Subscribed share capital 1,000,000
2. X pays P600,000.
Cash 600,000
Subscription receivable 600,000
3. The subscription balance is called and X defaults.
No entry.
Journal entries
4. The corporation pays P30,000 for expenses incurred in
connection with the auction of the delinquent shares.
Advances on delinquency sale 30,000
Cash 30,000
5. A is the highest bidder. A pays the subscription balance of
P400,000 plus interest of P20,000 plus the delinquency expenses
of P30,000, for a bid of 4,500 shares.
Cash 450,000
Subscription receivable 400,000
Interest income 20,000
Advances on delinquency sale 30,000
Journal entries
6. The corporation issues the shares to A, 4,500 shares, and
X, 5,500 shares.
Subscribed share capital 1,000,000
Share capital 1,000,000
Suppose there are no bidders? As stated earlier, the
corporation may bid in the absence of a bidder or a highest
bidder.
Journal entries
a. Treasury shares 450,000
Subscription receivable 400,000
Interest income 20,000
Advances on delinquency sale 30,000

b. Subscribed share capital 1,000,000

Share capital 1,000,000