Accounting Philippines

Retained Earnings Transaction

Problem 12: Equity Transaction. Rian Corporation has the following capital structure at the beginning of the year: P 300,000 Share capital-preference 6%, P50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding Share capital-ordinary, P10 par value, 60,000 shares authorized, 40,000 shares issued and outstanding Share premium-ordinary Retained earnings Total equity FOR EVALUATION CORY 400,000 110,000 440,000 P1.250.000 Required: (a) Record the following transactions which occurred consecutively (show all calculations). 1. A total cash dividend of P90,000 was declared and payable to shareholders of record. Record dividends payable on ordinary and preference shares in separate accounts 2. A 10% ordinary share dividend was declared. The average fair value of the ordinary shares is P18 a share. 3. Assume that net income for the year was P150,000 (record the closing entry) and the board of directors appropriated P70,000 of retained earnings for plant expansion (b) Construct the stockholders' equity section incorporating all the above information