Problem

Shareholders' Equity Transactions and statement of Financial position presentation

The shareholder's equity og M. Gangoso corporation at Jan 1, 2016 appers below:

*% preference share, P250 par, 15,000 shares authorized,                 P 1450,000

5500 share issued and outstanding

Share premium preference                                                                            870,000

Ordinary shares P100 par, 200, 0000 shares authorized, 40,000 shares issued and outstanding 4,000,000    

  Share premium Ordinary                                                                            2,400,000

Retained Earnings                                                                                       2,700,000

During 2016, the following transactions occurred:

Jan 10 Issued 16,000 ordinary shares for P180 cash per share.

        23 Purchased 6,000 ordinary shares for the treasury at P200 per share.

Mar 2 Shareholders donated 4000 ordinary shares to the corporation.

       14 sold one-half of the treasury share acquired last Jan. 23 for P210 per share     

       14 Sold the donated shares at P210 per share.

July 15 Issued 3200 preference shares to acquire special equipment with a fair market value of P1,440,000.

Sep. 15 Received subscriptions to 18,000 ordinary shares at P250  per share.

Oct  15 Received Cash payment from each subscriber for 40 % of the ordinary shares subscription price.

Nov. 15 Received the balance due on the Sept. 15 share subscriptions in cash and issued the stock certificates.    

Dec. 31 Closed profit of P522,000 from the income summary account to retained Earning.

Required:

 1. Set up T-accounts for the shareholder's equity accounts at the beginning of the year and enter January 1 balances.

2. Prepare journal entries to record the foregoing transactions and post to T- accounts. Determine the ending balances for the shareholders equity accounts.

3. Prepare the Dec. 31, 2016 shareholder's equity section of the statement of the financial position.