Answer with solution and explanation

35. An entity showed the following shareholders' equity on December 31, 201: Preference Share Capi P100 pr, 50,000 shares Ordinary Share Capital, P0 par150,000 shares P5,000,000 P7,300,000 Earnings P4,000,000 The preference dividend rate is 12% and the preference share is cumulative and fully participating. Dividends on the preference share are in arrears for 2017 and 2018. On December 31, 2018, the board of directors of the entity would like to pay the ordinary shareholders a dividend of P10 per share. To attain the dividend objective of the entity, how much maximum dividend would be declared on the preference and ordinary shares? A. PO B. P1,500,000 C. P2,500,000 D. P3,100,000 36. Liquidating dividends are adherent to: A. Legal Capital Doctrine B. Trust Fund Doctrine C. Retained Earnings Doctrine D. Wasting Asset Doctrine The following accounts appear in the statement of financial position of a wasting asset entity at year-end Resource Property P10,000,000 P2.000,000 P3,000,000 Retained Earmings 37. The maximum dividends that my be declared would be: A. P1,000,000 B. P2,000,000 C. P3,000,000 D. P5,000,000 38. Dividend declaration for the account above would include A. Credit to Retained Earmings for P5,000,000 B. Debit to Capital Liquidated for P2,000,000 C. Debit to Dividends Payable for P5,000,000 D, Credit to Dividends Payable for P2,000,000 39. Nondistributable reserve usually include the following, except A. Share Premium Reserve B. Profit or Loss Reserve C. Asset Revaluation Reserve D. Appropriation Reserve 40. Items affecting directly retained earnings include the following except: A. Net income or loss B. Prior Period Errors C. Dividends to sharcholders E. Unappropriated retained earnings