ISSUANCE OF NO PAR VALUE SHARE LIMITATIONS: 1. No par value shares cannot be issued for a consideration less than P5.

00 2. No-par value shares cannot be issued without being fully paid 3. No-par value shares cannot be issued by banks, trust companies, insurance companies, building and loan associations and public utilities. 4. Entire considerations received by the corporations for its no-par value shares shall be treated as capital and shall not be available for distribution as dividends. 5. Only memorandum entry method can be used.

Sold 1,000 ordinary shares at P15 per share. Issued 1,000 common shares at P20 per share. Received subscript ions for 2,000 shares at

PAR VALUE P10 Cash 15,000 Ordinary share Capital 10,000 Share Premium -Ordinary 5,000 Cash 20,000 Ordinary share Capital 10,000 Share Premium -Ordinary 10,000 Subscription Receivable -Ord 60,000 Ordinary share Capital 20,000 Share Premium -Ordinary

NO-PAR VALUE W/O STATED VALUE Cash 15,000 Ord. share Capital, no par 15,000

NO-PAR VALUE W/ STATED VALUE P15 Cash 15,000 Ord. share Capital, no par 15,000

Cash 20,000 Ord. share Capital, no par 20,000

Subscription Receivable 60,000 Subcribed Ord. Share Capital. 60,000

Cash 20,000 Ord. share Capital, no par 15,000 Share Premium- no par 5,000 Subscription Receivable 60,000 Subcribed Ord. Share Capital. 30,000 Share Premium- no par

P30 per share

40,000

30,000

DELINQUENT SHARES a. the subscriber was unable to pay the subscription balance. b. The subscriber was given at 30 days by the Board of Directors to settle the subscription balance. c. Failure to settle, the BOD has the right to sell the delinquent shares at public auction. d. The Highest Bidder is the person who bids for the least the number of shares and paid the subscription balance and other expenses. Example: 1. Received subscriptions for 2,000 ordinary shares for P30,000. Par value of the stock is P10. Subscription Receivable Ordinary Share 30,0000 Subscribed Ordinary Share capital 20,000 Share Premium-Ordinary Share 10,000 Cash 12,000 Subscription Receivable Ordinary Share 12,000 No entry

2. Collected P12,000 form the subscriber 3. After 30 days notice the

subscriber failed to settle the balance and the stocks were sold at public auction. 4. Paid the advertising expenses Receivable form Highest Bidder amounting to P1,200. 1,200 Cash 1,200 5. The highest bidder bids for 1650 Cash shares and paid the amount due. 19,200 Subscription Receivable Ordinary Share 18,000 Receivable form Highest Bidder 1,200 Subscribed Ordinary Share capital 20,000 Ordinary Share capital 20,000

If the corporation purchased the delinquent shares, the journal entry in #5 is: 5. The highest bidder bids for 1650 shares and paid the amount due. Treasury Share 19,200 Subscription Receivable Ordinary Share 18,000 Receivable form Highest Bidder

1,200 Subscribed Ordinary Share capital 20,000 Ordinary Share capital 20,000

TREASURY SHARES a. recorded at cost

b. acquired through purchase or donation c. sold at cost , above cost and below cost. d. Sufficient retained earnings before acquiring own stocks. Transactions: Ordinary Share Capital P50 par Share Premium-Ordinary Share Accumulated Profit
1. Reacquired 500 ordinary share capital at P60 per share 2. Sold 100 ordinary treasury shares at P60 per share 3. Sold 100 ordinary treasury shares for P10,000. 4. Sold 100 ordinary treasury shares at P40 per share 5. Sold 100 ordinary treasury shares at P30 per share

P 500,000 100,000 200,000

Treasury Shares -Ordinary 30,000 Cash 30,000 Cash 6,000 Treasury shares -Ordinary 6,000 Cash 10,000 Treasury shares -Ordinary 6,000 Share Premium- Ordinary Treasury Shares 4,000 Cash 4,000 Share Premium- Ordinary Treasury Shares 2,000 Treasury shares-Ordinary 6,000 Cash Share Premium- Ordinary Treasury Shares Accumulated Profit 3,000 2,000 1,000

Treasury shares-Ordinary 6,000 6. Sold 10 ordinary treasury Cash shares at P50 per share Accumulated Profit Treasury shares-Ordinary 600 500 100

UNSOLD Treasury shares 90 X 60

6. Mr. Cruz donated 50 ordinary shares to the corporation. 7. Sold donated shares for P5,000.

Accumulated Profit 5,400 Accumulated Profit - Appropriated for Ordinary Treasury Shares 5,400 Appropriation for unsold treasury stock. Memo Entry: Received 50 ordinary shares from Mr. Cruz as donation. Cash 5,000 5,000 Share Premium- Donated Shares