Solution To Chapter 2

2-1 The Gallery Company
Cash 10,000,000.00
Ordinary Share Capital
Legal Expenses (Organization Costs) 150,000.00

Land 5,000,000.00
Building 3,000,000.00
Share Premium - OS
Cash 3,575,000.00
Share Premium - OS
Cash 2,750,000.00
Subscription Receivable 8,250,000.00
Subscribed Ordinary Share Capital
Share Premium - OS
Cash 5,280,000.00
Subscribed Ordinary Share Capital 6,000,000.00
Subscription Receivable
2-2 Independent Transactions
a Cash 2,000,000.00
Share Premium - OS
Indirect Issuance Costs (Public Relations) 25,000.00

Share Premium - OS 60,000.00
Cash
b Land 1,960,000.00
Share Premium - OS
c Cash 18,000,000.00
Preference Share Capital
Share Premium - Preference
Share Premium - Ordinary
Preference Share Capital 5,000.00

Ordinary Share Capital 100,000.00
Total
To Allocate the Issuance Price:

Preference Share Capital 4,500,000.00
Ordinary Share Capital 13,500,000.00
Total 18,000,000.00
d Cash 150,000.00
Subscription Receivable 450,000.00
e Land 5,000,000.00
Share Premium - Donated Capital
Share Premium - Donated Capital 40,000.00

Cash
2-3 The Blazing Red Corporation
1st Cash 1,880,000.00

2nd Cash 64,000.00

3rd Treasury Shares 18,000.00

Cash
4th Cash 76,800.00

Subscribed Ordinary Share Capital 80,000.00
Receivable from Highest Bidder 21,200.00

Cash
5th Cash 21,200.00

Receivable from Highest Bidder
Subscribed Ordinary Share Capital 20,000.00

Shareholders' Equity
Preference Share Capital 1,200,000.00
Share Premium - Preference 300,000.00
Share Premium - Ordinary 140,000.00
Retained Earnings 350,000.00
Less: Treasury Shares (18,000.00)
Total Shareholders' Equity 2,372,000.00
2-4 The Millennium Company
a.1 Treasury Shares 140,000.00

Cash
a.2 Cash 60,000.00

Treasury Shares
Share Premium - Treasury Shares
a.3 Cash 65,000.00

Share Premium - Treasury Shares 4,000.00
Treasury Shares
a.4 Ordinary Share Capital 10,000.00

Treasury Shares
b Shareholders' Equity
Total 2,265,000.00
2-5 The Consuelo Enterprises, Inc.
a The retirement price is P21 per share

Cash
Share Premium - Retirement of P/S
b The retirement price is P26 per share

Cash
2-6 The Concepcion Enterprises, Inc.
a Preference Share Capital 200,000.00

b Preference Share Capital 200,000.00

2-7 Red Stone Company
a Retained Earnings 200,000.00

Share Dividends Distributable
Share Premium - Share Dividends
b Retained Earnings 300,000.00

c The corporation effected a 2-for-1 share split. Shares issued and outstanding
are now held at 200,000 (100,000 x 2).
2-13 Red Ribbon Corporation
Beginning Balances
1. Retirement of P/S
2. Purchase of Ordinary shares
3. Share split of O/S
4. Reissuance of T/S
5. Donation of ordinary shares
6. Reissuance of donated shares
Balances before declaration of dividends
6. Declaration of dividends
7. Income for the period
Balances, end
1 Preference Share Capital 800,000.00

Cash
2 Treasury Shares 640,000.00

Cash
3 The corporation effected a 2-for-1 split on ordinary shares, reducing the par to P25.
The shares issued are now 200,000 (100,000 x 2).
4 Cash 270,000.00
Treasury Shares
Share Premium - T/S

6 Cash 96,000.00
Treasury Shares
Share Premium - T/S
7 Retained Earnings 812,000.00

Dividends Payable
Preference Dividends 624,000.00
Ordinary Shares 188,000.00
Total 812,000.00
8 Income Summary 2,000,000.00

Retained Earnings
10,000,000.00
150,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
10,000,000.00
1,000,000.00
5,280,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
84,000.00
2,400.00
104,000.00
300,000.00
150,000.00
66,000.00
100,000.00
100,000.00
300,000.00
d and outstanding
Preference Shares Ordinary Shares
No. of Shares Amount No. of Shares
g Balances 30,000.00 6,000,000.00 100,000.00
ment of P/S (4,000.00) (800,000.00)
se of Ordinary shares
split of O/S 26,000.00 5,200,000.00 200,000.00
ance of T/S
on of ordinary shares
ance of donated shares
before declaration of dividends 26,000.00 5,200,000.00 200,000.00
ation of dividends
for the period
26,000.00 5,200,000.00 200,000.00

a
b.
1,120,000.00
640,000.00
educing the par to P25.
240,000.00
30,000.00
184,000.00
92,000.00
4,000.00
812,000.00
d
2,000,000.00
Ordinary Shares Share Premium Share Premium Retained Treasury Shares
Amount Preference Ordinary Earnings No. of Shares
5,000,000.00 1,800,000.00 1,500,000.00 2,200,000.00
(240,000.00) (80,000.00)
8,000.00
5,000,000.00 1,560,000.00 1,500,000.00 2,120,000.00 16,000.00
(6,000.00)
4,000.00
(2,000.00)
5,000,000.00 1,560,000.00 1,500,000.00 2,120,000.00 12,000.00
(812,000.00)
2,000,000.00
5,000,000.00 1,560,000.00 1,500,000.00 3,308,000.00 12,000.00
Issued 200,000.00
Outstanding 188,000.00
Total SHE 16,294,000.00

Treasury Shares Share Premium Share Premium
Amount Treasury Shares Treasury Shares
640,000.00
640,000.00
(240,000.00) 30,000.00
184,000.00 184,000.00
(92,000.00) 4,000.00
492,000.00 30,000.00 188,000.00
492,000.00 30,000.00 188,000.00

c
1st Cash 10,000,000.00

2nd Organization Costs 180,000.00

3rd Land 5,000,000.00

Building 3,000,000.00
4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

2-2 Independent Situations
a Cash 2,000,000.00
Public Relations Consultancy Fees 25,000.00

Cash
b Land 1,960,000.00
c Cash 18,000,000.00
Fair Value of Shares

Preference Shares 5,000.00
Total
To Allocate the Issue Price:

Preference Shares 4,500,000.00
Ordinary Shares 13,500,000.00
Total 18,000,000.00
d Cash 150,000.00
Subscribed Share Capital
e Land 5,000,000.00

Cash
a Cash 380,000.00
Equipment 1,500,000.00
b Cash 64,000.00
c Treasury Shares 18,000.00

Cash
d Cash 76,800.00
Subscribed Share Capital 80,000.00
Receivable from the Highest Bidder 21,200.00

Cash
e Cash 21,200.00
Receivable from the Highest Bidder
f Income Summary 350,000.00

Retained Earnings
Retained Earnings
Less: Treasury Shares
Total

Cash
a.2 Cash 60,000.00

Treasury Shares
a.3 Cash 65,000.00

Treasury Shares

Treasury Shares
Total 2,265,000.00
a Assuming that the retirement price is P21 per share:

Cash
b Assuming that the retirement price is P26 per share:

Cash


Share Premium - Conversion of P/S
2-7 The Red Stone Company

Share Dividends Distributable 100,000.00


c The corporation effected a 2-for-1 share split. Shares issued and outstanding now held is
200,000 (100,000 x 2), with par value of P5 per share.
2-13 The Red Ribbon Corporation
Beginning Balances
1. Retirement of P/S
2. Reacquisition of O/S
3. A 2-for-1 share split
4. Reissuance of T/S
5. Donation of O/S by shareholder
6. Reissuance of Donated Shares
7. Declaration of Dividends
8. Income for the period
Ending Balances

Cash

Cash
3 The corporation effected a 2-for-1 share split. Shares issued and outstanding now held is
200,000 (100,000 x 2), with par value of P25 per share.
4 Cash 270,000.00
Treasury Shares
Share Premium - T/S

6 Cash 96,000.00
Treasury Shares
Share Premium - T/S

Dividends Payable
Preference 624,000.00
Ordinary 188,000.00
Total 812,000.00

Retained Earnings
10,000,000.00
150,000.00
30,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
10,000,000.00
1,000,000.00
4,950,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
350,000.00
1,200,000.00
300,000.00
400,000.00
140,000.00
350,000.00
(18,000.00)
2,372,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
84,000.00 Issue Price 21.60

2,400.00 RP 21.00
Excess 0.60
Retired Shares 4,000.00
SP 2,400.00
104,000.00 Issue Price 21.60

RP 26.00
Excess 4.40
17,600.00
OIP 21.60
Par of O/ 30.00
Excess 8.40
300,000.00 No. of O/ 10,000.00
Debit to 84,000.00
150,000.00
66,000.00
100,000.00
100,000.00
100,000.00
300,000.00
300,000.00
d and outstanding now held is

g Balances 30,000.00 6,000,000.00 100,000.00
ment of P/S (4,000.00) (800,000.00)
uisition of O/S
1 share split 100,000.00
ance of T/S
on of O/S by shareholder
ance of Donated Shares
ation of Dividends
for the period
26,000.00 5,200,000.00 200,000.00
1,120,000.00
640,000.00
d and outstanding now held is

240,000.00
30,000.00
184,000.00
92,000.00
4,000.00
812,000.00
2,000,000.00
5,000,000.00 1,800,000.00 1,500,000.00 2,200,000.00
(240,000.00) (80,000.00)
8,000.00
8,000.00
(6,000.00)
4,000.00
(2,000.00)
(812,000.00)
2,000,000.00
5,000,000.00 1,560,000.00 1,500,000.00 3,308,000.00 12,000.00
16,294,000.00
Amount Treasury Shares Donated Capital
640,000.00
(240,000.00) 30,000.00
184,000.00 184,000.00
(92,000.00) 4,000.00
492,000.00 34,000.00 184,000.00

1st Cash 10,000,000.00


3rd Land 5,000,000.00

Building 3,000,000.00
4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

2-2 The Independent Transactions
a Cash 2,000,000.00
Public Consultancy Fees Expense 25,000.00

Cash
b Land 1,960,000.00
c Cash 18,000,000.00
Fair Value of the Shares

Total

Total 18,000,000.00
d Cash 150,000.00
e Land 5,000,000.00

Cash

Preference Share
1,200,000.00
1,200,000.00
1st Cash 380,000.00

2nd Cash 64,000.00

3rd Treasury Shares 18,000.00

Cash
4th Cash 76,800.00


Cash
5th Cash 21,200.00


Cash
a.2 Cash 60,000.00

Treasury Shares
a.3 Cash 65,000.00

Treasury Shares

Treasury Shares
Retained Earnings
Total
a Assuming the retirement price is P21 per share:

Cash
b Assuming the retirement price is P26 per share:

Cash





c The corporation effected a 2-for-1 share split. Shares issued and outstanding now
held are 200,000 (100,000 x 2) and the par is reduced to P5 (P10/2) per share.
Beginning Balances
1. Retired preference shares
2. Purchased own ordinary shares as treasury
3. Effected a 2-for-1 share split
Balances after the share split
4. Reissued treasury shares
5. Donation of ordinary shares by shareholder
8. Profit for the period
Ending Balances

Cash

Cash
3 The corporation effected a 2-for-1 share split. Shares issued now

held are 200,000 (100,000 x 2) and the par is reduced to P25 (P50/2) per share.
4 Cash 270,000.00
Treasury Shares
Share Premium - T/S

6 Cash 96,000.00
Treasury Shares
Share Premium - T/S

Dividends Payable
Total 812,000.00

Retained Earnings
10,000,000.00
150,000.00
30,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
10,000,000.00
1,000,000.00 8,250,000.00
(4,950,000.00)
3,300,000.00
4,950,000.00 3,300,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
Subscribed Treasury Retained

Ordinary Shares Share Premium
Share Capital Shares Earnings
300,000.00 380,000.00
60,000.00 100,000.00
(18,000.00)
80,000.00 (80,000.00)
20,000.00 (20,000.00)
350,000.00
400,000.00 440,000.00 - (18,000.00) 350,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
990,000.00
297,000.00
978,000.00
2,265,000.00
84,000.00 Issue Price 21.60

2,400.00 Retirement Price 21.00
Excess 0.60
Credit to SP 2,400.00
104,000.00 Retirement Price 26.00

Issue Price 21.60
Excess 4.40
Debit to RE 17,600.00
300,000.00 Issue Price 21.60

Par of OS 30.00
Excess 8.40
Converted PS 10,000.00
150,000.00 Debit to RE 84,000.00
66,000.00
100,000.00
100,000.00
100,000.00
300,000.00
300,000.00
d and outstanding now

5 (P10/2) per share.

g Balances 30,000.00 6,000,000.00 100,000.00
preference shares (4,000.00) (800,000.00)
sed own ordinary shares as treasury
d a 2-for-1 share split
after the share split 26,000.00 5,200,000.00 200,000.00
ed treasury shares
on of ordinary shares by shareholder
ation of dividends
or the period
26,000.00 5,200,000.00 200,000.00
a
b
1,120,000.00
640,000.00
25 (P50/2) per share.
240,000.00
30,000.00
184,000.00
92,000.00
4,000.00
812,000.00
2,000,000.00
2,372,000.00
5,000,000.00 1,800,000.00 1,500,000.00 2,200,000.00
(240,000.00) (80,000.00)
8,000.00
5,000,000.00 1,560,000.00 1,500,000.00 2,120,000.00 16,000.00

(6,000.00)
4,000.00
(2,000.00)
(812,000.00)
2,000,000.00
5,000,000.00 1,560,000.00 1,500,000.00 3,308,000.00 12,000.00
Issued 200,000.00 c
Outstanding 188,000.00 d
e
640,000.00
640,000.00 - -
(240,000.00) 30,000.00
184,000.00 184,000.00
(92,000.00) 4,000.00
492,000.00 34,000.00 184,000.00
400,000.00
812,000.00
16,294,000.00
2-1 The Gallery Corporation
1st Cash 10,000,000.00


3rd Land 5,000,000.00

Building 3,000,000.00
4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

a Cash 2,000,000.00

Cash
b Land 1,960,000.00
c Cash 18,000,000.00

Total

Total 18,000,000.00
d Cash 150,000.00
e Land 5,000,000.00

Cash
a Cash 380,000.00
b Cash 64,000.00

Cash
d Cash 76,800.00

Cash
e Cash 21,200.00

Retained Earnings
Retained Earnings
Total

Cash
a.2 Cash 60,000.00

Treasury Shares
a.3 Cash 65,000.00

Treasury Shares

Treasury Shares
Share Premium 297,000.00
Total 2,265,000.00

Cash

Cash





c The corporation effected a 2-for-1 shares split. Shares issued and outstanding are
200,000 (100,000 x 2) and the par is reduced to P5 (P10/2) per share.
Beginning Balances
1. Retirement of preference shares
2. Purchase of own shares as treasury
3. Effected a 2-for-1 share split
Balances after the share split
4. Reissuance of treasury shares
5. Donation of own shares from shareholder
8. Profit for the period
Ending balances

Cash

Cash
3 The corporation effected a 2-for-1 shares split. Shares issued and outstanding are
200,000 (100,000 x 2) and the par is reduced to P25 (P50/2) per share.
4 Cash 270,000.00
Treasury Shares
Share Premium - T/S

6 Cash 96,000.00
Treasury Shares
Share Premium - T/S

Dividends Payable
Total 812,000.00

Retained Earnings
10,000,000.00
150,000.00
30,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
10,000,000.00 8,250,000.00
1,000,000.00 (4,950,000.00)
3,300,000.00
3,300,000.00
4,950,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
350,000.00
1,200,000.00
300,000.00
400,000.00
140,000.00
350,000.00
(18,000.00)
2,372,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
Issue Price 21.60

Retirement Price 21.00
84,000.00 Excess 0.60
2,400.00 Retired Shares 4,000.00
Credit to SP 2,400.00
104,000.00
300,000.00
150,000.00
66,000.00
100,000.00
100,000.00
100,000.00
300,000.00
300,000.00
ed and outstanding are

per share.

g Balances 30,000.00 6,000,000.00 100,000.00
ment of preference shares (4,000.00) (800,000.00)
se of own shares as treasury
d a 2-for-1 share split 100,000.00
after the share split 26,000.00 5,200,000.00 200,000.00
ance of treasury shares
on of own shares from shareholder
ation of dividends
or the period
26,000.00 5,200,000.00 200,000.00
a
b
1,120,000.00
640,000.00
ed and outstanding are

) per share.
240,000.00
30,000.00
184,000.00
92,000.00
4,000.00
812,000.00
2,000,000.00
5,000,000.00 1,800,000.00 1,500,000.00 2,200,000.00
(240,000.00) (80,000.00)
8,000.00
8,000.00
5,000,000.00 1,560,000.00 1,500,000.00 2,120,000.00 16,000.00
(6,000.00)
4,000.00
(2,000.00)
(812,000.00)
2,000,000.00
5,000,000.00 1,560,000.00 1,500,000.00 3,308,000.00 12,000.00
Issued 200,000.00 c.
Outstanding 188,000.00
d
e
640,000.00
640,000.00 - -
(240,000.00) 30,000.00
184,000.00 184,000.00
(92,000.00) 4,000.00
492,000.00 34,000.00 184,000.00
400,000.00
812,000.00
16,294,000.00
1st Cash 10,000,000.00


3rd Land 5,000,000.00

Building 3,000,000.00
4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

Subscribed Share Capital 6,000,000.00
a Cash 2,000,000.00

Cash
b Land 1,960,000.00
c Cash 18,000,000.00

Total

Total 18,000,000.00
d Cash 150,000.00
e Land 5,000,000.00

Cash
a Cash 380,000.00
b Cash 64,000.00

Cash
d Cash 76,800.00
Receivable from Highest Bidder 21,200.00

Cash
e Cash 21,200.00
Receivable from Highest Bidder

Retained Earnings
Shaholders' Equity
Retained Earnings
Total
a1 Treasury Shares 140,000.00

Cash
a2 Cash 60,000.00
Treasury Shares
a3 Cash 65,000.00
Treasury Shares
a4 Ordinary Share Capital 10,000.00

Treasury Shares
Total 2,265,000.00

Cash

Cash


10,000,000.00
150,000.00
30,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
8,250,000.00
10,000,000.00 (4,950,000.00)
1,000,000.00 3,300,000.00
3,300,000.00
4,950,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
350,000.00
1,200,000.00
300,000.00
400,000.00
140,000.00
350,000.00
(18,000.00)
2,372,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
84,000.00
2,400.00
RP 26
Original Issue PR 21.6
Excess 4.4
104,000.00 Retired Shares 4000
Debit to RE 17600
300,000.00
150,000.00
66,000.00
1st Cash 10,000,000.00

2nd Organization Costs (Legal Expenses) 180,000.00

3rd Land 5,000,000.00

Building 3,000,000.00
4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

Subscribed Share Capital 6,000,000.00
a Cash 2,000,000.00

Cash
b Land 1,960,000.00
c Cash 18,000,000.00
Fair Value of Shares:

Total
To Allocate Issue Price:

Total 18,000,000.00
d Cash 150,000.00
e Land 5,000,000.00

Cash
a Cash 380,000.00
b Cash 64,000.00

Cash
d Cash 76,800.00

Cash
e Cash 21,200.00

Retained Earnings
Retained Earnings
Total
a1 Treasury Shares 140,000.00

Cash
a2 Cash 60,000.00
Treasury Shares
a3 Cash 65,000.00
Treasury Shares
a4 Ordinary Share Capital 10,000.00

Treasury Shares
Total 2,265,000.00

Cash

Cash
10,000,000.00
150,000.00
30,000.00
6,250,000.00
1,750,000.00
3,250,000.00
325,000.00
10,000,000.00 8,250,000.00
1,000,000.00 (4,950,000.00)
3,300,000.00
3,300,000.00
4,950,000.00
6,000,000.00
1,500,000.00
500,000.00
85,000.00
700,000.00
1,260,000.00
2,500,000.00
2,000,000.00
10,000,000.00
3,500,000.00
4,000,000.00
12,000,000.00
16,000,000.00
500,000.00
100,000.00
5,000,000.00
40,000.00
1,200,000.00
300,000.00
300,000.00
80,000.00
100,000.00
60,000.00
18,000.00
76,800.00
80,000.00
19,200.00
2,000.00
21,200.00
20,000.00
350,000.00
1,200,000.00
300,000.00
400,000.00
140,000.00
350,000.00
(18,000.00)
2,372,000.00
140,000.00
56,000.00
4,000.00
70,000.00
14,000.00
OIP 21.6
RP 21
84,000.00 Excess 0.6
2,400.00 Retired Shares 4000
Credit to SP 2400
104,000.00

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Solution To Chapter 2

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2-1 The Gallery Company

Legal Expenses (Organization Costs) 150,000.00

2-2 Independent Transactions

Indirect Issuance Costs (Public Relations) 25,000.00

Preference Share Capital 5,000.00

To Allocate the Issuance Price:

Share Premium - Donated Capital 40,000.00

2-3 The Blazing Red Corporation

1st Cash 1,880,000.00

2nd Cash 64,000.00

3rd Treasury Shares 18,000.00

4th Cash 76,800.00

Receivable from Highest Bidder 21,200.00

5th Cash 21,200.00

Subscribed Ordinary Share Capital 20,000.00

2-4 The Millennium Company

a.1 Treasury Shares 140,000.00

a.2 Cash 60,000.00

a.3 Cash 65,000.00

a.4 Ordinary Share Capital 10,000.00

2-5 The Consuelo Enterprises, Inc.

a The retirement price is P21 per share

b The retirement price is P26 per share

2-6 The Concepcion Enterprises, Inc.

a Preference Share Capital 200,000.00

b Preference Share Capital 200,000.00

2-7 Red Stone Company

a Retained Earnings 200,000.00

b Retained Earnings 300,000.00

1 Preference Share Capital 800,000.00

2 Treasury Shares 640,000.00

5 Treasury Shares 184,000.00

7 Retained Earnings 812,000.00

8 Income Summary 2,000,000.00

26,000.00 5,200,000.00 200,000.00

educing the par to P25.

5,000,000.00 1,560,000.00 1,500,000.00 3,308,000.00 12,000.00

Total SHE 16,294,000.00

492,000.00 30,000.00 188,000.00

1st Cash 10,000,000.00

2nd Organization Costs 180,000.00

3rd Land 5,000,000.00

4th Cash 3,575,000.00

5th Cash 2,750,000.00

6th Cash 4,950,000.00

2-2 Independent Situations

Public Relations Consultancy Fees 25,000.00

Fair Value of Shares

To Allocate the Issue Price:

Share Premium - Donated Capital 40,000.00

2-3 The Blazing Red Corporation

c Treasury Shares 18,000.00

Receivable from the Highest Bidder 21,200.00

f Income Summary 350,000.00

2-4 The Millennium Company

a.1 Treasury Shares 140,000.00

a.2 Cash 60,000.00

a.3 Cash 65,000.00

a.4 Ordinary Share Capital 10,000.00

2-5 The Consuelo Enterprises, Inc.

a Assuming that the retirement price is P21 per share:

b Assuming that the retirement price is P26 per share:

2-6 The Concepcion Enterprises, Inc.