SOLUTIONS TO PROBLEMS

PROBLEM 13.1
2020
(a) January 10 Cash (100,000 @ P48) 4,800,000
Share Capital-Ordinary, P20 stated value, 100,000 shares 2,000,000
Share Premium-Ordinary (100,000 @ P28) 2,800,000
Issued Ordinary shares for cash.

March. 1 Cash (5,000 @ P1,050) 5,250,000

Share Capital- 8% Preference, P1,000 par, 5,000 shares 5,000,000
Share Premium – Preference (5,000 @ P50) 250,000
Issued Preference shares for cash.

April 1 Land 920,000

Share Capital—Ordinary, P20 stated value, 18,000 shares 360,000
Share Premium—Ordinary (P920,000 – P360,000) 560,00
Issued Ordinary shares for land.

May 1 Cash (80,000 @ P45) 3,600,000

Share Capital—, P20 stated value, 80,000 shares 1,600,000
Share Premium—Ordinary (80,000 @ P25) 2,000,000
Issued Ordinary shares for cash.

August 1 Organization Expense 320,000

Share Capital-Ordinary, P20 stated value, 10,000 shares 200,000

Share Premium—Ordinary P320,000-P200,000)

120,000
Issued Ordinary shares for attorneys fees.

September 1 Cash (10,000 @ P50) 500,000

Share Capital-Ordinary, P20 stated value, 10,000 shares 200,000
Share Premium—Ordinary (10,000 @ P30) 300,000
Issued Ordinary shares for cash.

November 1 Cash (1,000 @ P1,060) 1,060,000

Share Capital- 8% Preference. P1,000 par, 1,000 shares 1,000,000
Share Premium—Preference (1,000 @ P60) 60,000
Issued Preference shares for cash.
(b)
Share Capital-8% Preference, P1,000 par
Date Explanation Ref. Debit Credit Balance
2020
March 1 J5 5,000,000 5,000,000
November 1 J5 1,000,000 6,000,000
 Share Capital-Ordinary, no par, P20 stated value
Date Explanation Ref. Debit Credit Balance
2020
January 10 J5 2,000,000 2,000,000
April 1 J5 360,000 2,360,000
May 1 J5 1,600,000 3,960,000
August 1 J5 200,000 4,160,000
September 1 J5 200,000 4,360,000
Share Premium-Preference
Date Explanation Ref. Debit Credit Balance
2020
March 1 J5 250,000 250,000
November 1 J5 60,000 310,000
Share Premium-Ordinary
Date Explanation Ref. Debit Credit Balance
2020
January 10 J5 2,800,000 2,800,000
April 1 J5 560,000 3,360,000
May 1 J5 2,000,000 5,360,000
August 1 J5 120,000 5,480,000
September 1 J5 300,000 5,780,000

(c) GÂO LIMITED

Statement of Shareholders’ Equity
December 31, 2020

Paid-In Capital:
Share capital-8% preference , P1,000 par value, 10,000 shares authorized
6,000 shares issued and outstanding P 6,000,000
Share capital-ordinary, no par, P20 stated value, 500,000 shares authorized
218,000 shares issued and outstanding 4,360,000
Share premium-preference 310,000
Share premium-ordinary 5,780,000
Total Shareholders’ Equity P16,450,000

PROBLEM 13.2
2020
(a) March 1 Treasury Shares (5,000 @ P9) 45,000
Cash 45,000
Purchased treasury shares.

June 1 Cash (500 @ P12) 6,000

Treasury Shares (500 @ P9) 4,500
Share Premium-Treasury (500 @ P3) 1,500
Sold Treasury shares.
.
 September 1 Cash (2,500 @ P10) 25,000
Treasury Shares (2,500 @ P9) 22,500
Share Premium-Treasury (2,500 @ P1) 2,500
Sold Treasury shares.

December 1 Cash (1,000 @ P6) 6,000

Share Premium-Treasury (1,000 @ P3) 3,000
Treasury Shares (1,000 @ P9) 9,000
Sold Treasury shares.

31 Income Summary 34,000

Retained Earnings 34,000
Transfer net income to Retained Earnings.

Share Premium—Treasury
Date Explanation Ref. Debit Credit Balance
2020
June 1 J10 1,500 1,500
September 1 J10 2,500 4,000
December 1 J10 3,000 1,000
Treasury Shares
Date Explanation Ref. Debit Credit Balance
2020
March 1 J10 45,000 45,000
June 1 J10 4,500 40,500
September 1 J10 22,500 18,000
December 1 J10 9,000 9,000
Retained Earnings
Date Explanation Ref. Debit Credit Balance
2020
January
December
1 Balance v 100,000
31 34,000 134,000
J10
(c) ELSTON LIMITED
Statement of Shareholders’ Equity
December 31, 2020

Paid-In Capital:
Share capital-Ordinary, P5 par, 80,000 shares issued and
9,000 outstanding P 400,000
Share premium-Ordinary 200,000
Share premium-Treasury 1,000
Total Paid-In Capital ………………………………………………………
P601,000
Retained earnings 134,000
 Total Paid-In Capital and Retained Earnings ………………………………..
P735,000
Less: Treasury shares (1,000 shares@ cost) 9,000
Total Shareholders’ Equity P726,000

PROBLEM 13.3
(a) 2020
February 1 Cash 120,000
Share Capital—Ordinary, P1 stated value, 30,000 shares 30,000
Share Premium—Ordinary (P120,000 – P30,000) 90,000
Issued Ordinary shares for cash.

April 14 Cash 42,000

Treasury Shares (9,000 @ P2.50) 22,500
Share Premium—Treasury (P42000 – P22,500) 19,500
Sold Treasury shares.

September 3 Patents 32,000

Share Capital—Ordinary , P1 stated value, 7,000 shares 7,000
Share Premium—Ordinary (P32,000 – P7,000) 25,000
Issued Ordinary shares for a patent.

November 10 Treasury Shares 6,000

Cash 6,000
Purchased Treasury shares.

December 31 Income Summary 452,000

Retaiined Earnings 452,000
Transfer net income to Retained earnings.
(b)
Share Capital- 9% Cumulative Preference, P50 par
Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance V 400,000

Share Capital—Ordinary, P1 stated value

Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance 1,000,000
February 1 v 30,000 1,030,000
September 3 7,000 1,037,000
J5
J5
Share Premium-Preference
 Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance 100,000
v
Share Premium-Ordinary
Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance 1,450,000
February 1 v 90,000 1,540,000
September 3 25,000 1,565,000
J5
J5
Share Premium—Treasury
Date Explanation Ref. Debit Credit Balance
2020
April 14 J5 19,500 19,500
Retained Earnings
Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance 1,816,000
December 31 v 452,000 2,268,000
J5
Treasury Shares
Date Explanation Ref. Debit Credit Balance
2020
January 1 Balance 50,000
April 14 v 22,500 27,500
November 10 6,000 33,500
J5
J5

(c) TERRELL SE
Statement of Financial Position (Partial)
December 31, 2020

Paid-In Capital:
Share Capital-9% Cumulative Preference, P50 par, 10,000 shares authorized
8,000 shares issued and outstanding p 400,000
ShareCcapital-Ordinary, no par, P1 stated value, 2,000,000 shares authorized,
1,037,000 shares issued and 1,025,000 shares outstanding 1,037,000
 Share Premium-Preference 100,000
Share Premium- Ordinary 1,565,000
Share premium—treasury 19,500
Total Paid-In Capital …………………………………………………. P3,121,500
Retained earnings (see Note) 2,268,000
Total Paid-In Capital and Retained Earnings ………………………………..
P5,389,500
Less: Treasury shares (12,000 shares @ cost) 33,500
Total Shareholders’ Equity P5,356,000
Note: Dividends on preference shares totaling P36,000 (8,000 shares @ (9% @ P50)] are in
arrears.

COMPREHENSIVE ACCOUNTING CYCLE REVIEW

(Working paper shown on next page. Another approach to answer ACR Problem )

(c) VOLTAIRE ENTERPRiSES

Statement of Comprehensive Income Statement
For the Year Ended December 31, 2020

Service Revenue P303,000

Operating Expenses 220,100
Income Before Income Tax P 82,900
Income Tax Expense 24,870
Net income P 58,030

VOLTAIRE ENTERPRISES
Statement of Shareholders’ Equity
For the Year Ended December 31, 2020
Paid-In Capital:
Share Capital-Preference, P20 par, 1,500 shares issued and P 30,000
outstanding 3.000
Share Premium-Preference
…………………………………………………………………… 50,000
Share Capital-Ordinary, P1 par,50,000 shares issued and 5,400
49,600 shares outstanding P
………………………………………………………….. 88,400
Share Premium-Ordinary P147.400
………………………………………………………………………
Total Paid-In Capital
……………………………………………………………………
Retained Earnings:
Balance, January 1, 2020
……………………………………………………………………….
Add Net income 58.030
Total P205,430
Less Dividends 27,250
 Retained Earnings, December 31, 2020
178,18
0
Total Paid-In Capital and Retained Earnings P266,5
80
Less Treasury Shares (400 shares @ cost)
3,200
Total Shareholders Equity P264,2
80

VOLTAIRE ENTERPRISES
Statement of Financial Position
December 31,2020

Assets
Current Assets:
Cash ₱143,300
………………............................................................
Accounts Receivable ₱ 53,200
………………………………………………..
Less Allowance for Doubtful Accounts 3,500 49,700
……………..
Supplies 5,900
Total current assets ₱198,900
Noncurrent Assets:
Property, Plant, and Equipment:
Land ₱ 40,000
……………………………………………………………
……
Buildings ₱130,000
…………………………………………………………
Less Accumulated Depreciation 24,000 106,000
……………..
Total Noncurrent Assets 146,000
…………………………………
Total Assets ₱344,900

Liabilities and Shareholders’ Equity

Current Liabilities:
Accounts Payable ₱ 19,500
…………………………………………………….
Unearned Revenue 9,000
………………………………………………..
Income Tax Payable 24,870
………………………………………………..

Copyright © 2018 WILEY Weygandt, Accounting Principles, IFRS 1/e, Solutions Manual (For Instructor Use Only) 13-7
 Dividends Payable 27.250
………………………………………………….
Total Liabilities ₱ 80,620
……………………………………………….
Shareholders’ Equity per Statement 264,280
………………………………….
Total Liabilities and Shareholders’ Equity ₱344,900
…………………………………