Midi Inc. has an authorized capital of 1,000 shares of P100 par, 8% cumulative preference shares and 100,000 shares of P10 par ordinary shares. The equity account balances at

December 31, 2020, are as follows:

Cumulative preference shares P 50,000

Ordinary shares 90,000

Additional paid-in capital 9,000

Retained earnings 13,000

Treasury shares, ordinary -100 shares at cost (2,000)

P160,000

Problem: Dividends on preference shares are in arrears for the year 2020. The book value per

ordinary share at December 31, 2020, should be

a. P11.78

b. P11.91

c. P12.22

d. P12.36