delinquent subscriptions
DESCRIPTION
Partnership and CorporationTRANSCRIPT
DELINQUENT SUBSCRIPTIONS
When a subscriber fails to pay for her subscription, even after he/she is given a grace period his/her subscription is declared delinquent.
The subscription is bidded out to interested parties
The highest bidder pays the unpaid portion of the subscription plus interest and additional costs.
PHILIPPINE CORPORATION
The corporation is authorized to issue 1,000,000 shares at P2 per share.
Short method with bidders
1 Subsribtion receivable 20,000 Subscribed share capital 20,000
Ms. Gloria subscribed to 10,000shares at P2 per share.
2 Cash 5,000 Subscription receivable 5,000
Ms. Gloria made partial paymentfor her subscription.
3 no entry
4 Receivable from highest bidder 2,500 Cash 2,500
Incurred advertising costs for the sale of delinquent shares
5 no entry
6 Cash 17,500 Subscription receivable 15,000 Receivable from highest bidder 2,500
The highest bidder paid the amount due
7 Sibscribed share capital 20,000 Share capital 20,000
Issued the stock certificates
Short method with no bidders
1 Subsribtion receivable 20,000 Subscribed share capital 20,000
Ms. Gloria subscribed to 10,000shares at P2 per share.
2 Cash 5,000 Subscription receivable 5,000
Ms. Gloria made partial paymentfor her subscription.
3 no entry
Advertisement expenses for delinquentshares
6 Cash 17,500 Subscription receivable 15,000 Receivable from highest bidder 2,500
Collected ullpayment from the highestbidder
7 Subscribed share capital 20,000 Share capital 20,000
Issuance of stock certifictes.
Short method with no bidders
4 Receivable from highest bidder 2,500 Cash 2,500
Incurred advertising costs for the sale of delinquent shares
5 Treasury shares 17,500 Subscription receivable 15,000 Receivable from highest bidder 2,500
Corporation acquires delinquent shares
6 Subscribed share capital 20,000 Share capital 20,000
Issuance of stock certificates
8-1
A Highest bidder - CarloCarlo
B Eduardo's subscription 100 sharesPar value 100 Total amount of subscription P 10,000 Payment 2,000 Balance - subscription receivable P 8,000 Expenses related to delinquentshares 1,500 Receivable from highest bidder P 9,500
C Shares issued to Eduardo 25 sharesD Shares issued to the highest bidder 75 shares
8-2
No. of Issue Amount ofshares Price subsription
Subscribed shares 200 P 52 P 10,400 Payment by Regine 100 5,200 Balance 100 P 5,200
a Shared issued to Regine 0b Shares issued to the
corporation 200
c Treasury shares P 11,400
Subscription P 10,400 Advertising 1,000 Treasury shares P 11,400