Problem Solving

e declaration and distribution of stock payable on April 15 to dividends under each of the following independent assumptions: 1. A 15% share capital dividend was declared and issued. 2. A 50% share capital dividend was declared and issued. ayable on Sept. 30 to Exercise 9-6 (Cash, Share Capital, and Property Dividends) laration and distribution The PQR Corporation reports the following balances of January 1, 2014: Ordinary share capital, P25 par, 2,000 shares outstanding Ordinary share premium P 50,000 Retained earnings 20,000 150,000 The following dividend declarations were made during the year: r 31, 2013 reports the Mar. 15 Declared a cash dividend of P5 per share payable on April 15 to shareholders of record of March 31. P 5,000,000 July Declared as dividends the stocks of Pentagon Corp. owned by PQR 2,500,000 Corp. One share of Pentagon Corp. stock will be distributed for every 3,000,000 share of PQR Corp. stock owned. The stocks of Pentagon have a carrying value of P20 per share. Declared a 30% stock dividend distributable on December 1 to able on May 2 to shareholders of record of November 15. Stocks are selling on this date at P50 per share. Instructions: Record the declaration and distribution of the above dividends. 15 to shareholders 060 per share. of Cash Dividends to Preference and Ordinary Shareholders)shares and ordinary shares for each year under each of the following independent assumptions: Pro 1. The preference shares are noncumulative and nonparticipating. 2. The preference shares are cumulative but nonparticipating. 3. The preference shares are noncumulative but participating. 4. The preference shares are cumulative and participating. 5. The preference shares are noncumulative but participating up to an additional 8%. Exercise 9-8 (Book Value per Share of Preference and Ordinary Share Capital) The XYZ Corporation's statements of financial position shows total shareholders' equity of P5,000,000 as of December 31, 2014. Z Instructions: Compute the book value per share of each class of share capital under each of the following independent assumptions: 1. The company has only one class of shares outstanding: 200,000 ordinary shares, par value P15. 2. The company has two classes of shares outstanding: 10,000 shares of P100 par preference share capital with a liquidation value of P120 per share and 100,000 shares of P15 par ordinary share capital. Exercise 9-9 (Earnings Per Share) The YZA Corporation has 100,000 ordinary shares authorized, par value P10. As of the end of the reporting period, 60,000 of the shares are outstanding.1. The company has only one class of shares outstanding: 200,000 ordinary shares par value P15. 2. The company has two classes of shares outstanding: 10,000 shares of P100 par preference share capital with a liquidation value of P120 per share and 100,000 shares of P15 par ordinary share capital. Exercise 9-9 (Earnings Per Share) The YZA Corporation has 100,000 ordinary shares authorized, par value P10. As of the end of the reporting period, 60,000 of the shares are outstanding. Instructions: Compute the earnings per share assuming the company has a profit of P10,000 d. P150,000 P70,000 e. P180,000 P90,000 Exercise 9-10 (Earnings Per Share; Two Classes of Share Capital Outstanding) The ZAB Corporation has the following information relating to its share capital: 10% Preference shares, cumulative, P100 par value, 30,000 shares authorized, 20,000 shares outstanding P2,000,000 Ordinary shares, P10 par value. 500,000 shares authorized, 300,000 shares outstanding 3,000,000 Instructions: Compute earnings per share assuming that the reported. profit of the company is P750,000.Earnings per Share Chapter 9- Operations, Dividends, Book Value per Share, and Earnings per Share 375 Exercise 9-5 (Small and Large Share Capital Dividends) GH Company The LMN Corporation has 500,000 shares of P10 par ordinary share capital outstanding as of October 1, 2014. On this date, the Board of Directors declared a share capital dividend distributable on November 20, 2014 to shareholders of record of October 30. 4,000,000 The market price of each ordinary share is P25 on October 1; P23 on October 30 and P30 on November 20. 2,000,000 1,500,000 Instructions: Prepare the entries to record the declaration and distribution of stock dividends under each of the following independent assumptions: 1. A 15% share capital dividend was declared and issued. April 15 to 2. A 50% share capital dividend was declared and issued. Exercise 9-6 (Cash, Share Capital, and Property Dividends) Sept. 30 to The POR Corporation reports the following balances of January 1, 2014: Ordinary share capital, P25 par, 2,000 shares outstanding P 50,000 bution Ordinary share premium 20,000 150 000Chapter 9 - Operations, Dividends, Book Value per Share, and Earnings per Share Instructions: Calculate the amount that will be paid per share and in total on preference shares and ordinary shares for each year under each of the following independent assumptions: 1. The preference shares are noncumulative and nonparticipating. 2. The preference shares are cumulative but nonparticipating 3. The preference shares are noncumulative but participating. 4. The preference shares are cumulative and participating. 5. The preference shares are noncumulative but participating up to an additional 8% Exercise 9-8 (Book Value per Share of Preference and Ordinary Share Capital) The XYZ Corporation's statements of financial position shows total shareholders' equity of P5,000,000 as of December 31, 2014. Instructions: Compute the book value per share of each class of share capital under each of the following independent assumptions:373 the statement of EXERCISES Exercise 9-1 (Shareholders' Equity) Below is a partial list of account titles and balances for the ABC Company as of December 31, 2014: holders' equity? Cash in Banks ds? Notes Receivable P 320,000 10% Preference Share Capital, P100 par, cumulative 24,000 10,000 shares authorized 400,000 bited to Retained Ordinary Share Capital, P20 par, 100,000 shares authorized Ordinary Share Capital Subscribed 1,000,000 200,000 Ordinary Share Capital Subscription Receivable k) dividend? (due within six months) 50,000 Preference Share Premium 150,000 Ordinary Share Premium 200,000 n of dividends to Retained Earnings 250,000 are capitals are Accounts Payable 150,000 Purchases 500,000 puted if (a) only Instructions: Prepare the shareholders' equity section of the statement of financial share capital are position. Exercise 9-2 (Shareholders' Equity)Mar. dividend of P5 per share payable on April 15 to shareholders of record of March 31. 000 000 Declared as dividends the stocks of Pentagon Corp. owned by PQR Corp. One share of Pentagon Corp. stock will be distributed for every share of PQR Corp. stock owned. The stocks of Pentagon have a carrying value of P20 per share. Declared a 30% stock dividend distributable on December 1 to 2 to shareholders of record of November 15. Stocks are selling on this date at P50 per share. Iders Instructions: Record the declaration and distribution of the above dividends. ioned Exercise 9-7 (Allocation of Cash Dividends to Preference and Ordinary Shareholders) The STU Co. has paid dividends for the last three years as follows: 2012 - P2,500,000; 2013 - P3,500,000; 2014 - P6,500,000. During the last three years, the company has the following outstanding share capital: 100,000 shares of P100 par, 12% Preference Share Capital and 500,000 shares of P10 par Ordinary Share Capital. Dividends are in arrears for two years at the beginning of 2012.Sept. Declared a cash shareholders of record of Sept. 15. The P Ordi Instructions: Prepare necessary journal entries to record the declaration and distribution Ordi of cash dividends. Reta Exercise 9-4 (Cash and Share Capital Stock Dividends) The follow The statement of financial position of JKL Corp. as of December 31, 2013 reports the Mar. following shareholder' equity accounts: Ordinary Share Capital, P50 par, 100,000 shares outstanding P 5,000,000 Ordinary Share Premium 2,500,000 Retained Earnings 3,000,000 During 2014, the following dividend distributions were made: Oct. April 1 Declared a cash dividend of P2 per share payable on May 2 to shareholders of record of April 15. June 1 Declared a 10% stock dividend distributable on July 15 to shareholders Instructio of record of June 30. Stocks are selling on this date at P60 per share. Instructions: Record the declaration and distribution of each of the above mentioned dividends. Exercise The STU 2013 - P following Capital a for tix374 Chapter 9 - Operations, Dividends, Book Value per Share, and Earnings per Share Chapter Exercise 9-3 (Cash Dividends) Exerci The shareholders' equity section of the statement of financial position of FGH Company The LI shows the following as of January 1, 2014: as of divide Ordinary share capital, P100 stated value, 100,000 The m shares authorized, 40,000 shares outstanding P 4,000,000 on No Ordinary share premium 2,000,000 Retained earnings 1,500,000 Instru divide During the year, the corporation had declared the following dividends: Mar 1 Declared a cash dividend of P10 per share payable on April 15 to shareholders of record of March 31. Exerc Sept. 1 Declared a cash dividend of P20 per share payable on Sept. 30 to shareholders of record of Sept. 15. The P Instructions: Prepare necessary journal entries to record the declaration and distribution of cash dividends. Exercise 9-4 (Cash and Share Capital Stock Dividends) The f The statement of financial position of JKL Corp. as of December 31, 2013 reports the Mar.150,000 d if (a) only 500,000 capital are position. Instructions: Prepare the shareholders' equity section of the statement of financial ers? How is o classes of Exercise 9-2 (Shareholders' Equity) CDE Company has the following selected account balances at June 30, 2014: What is the Ordinary Share Capital, no-par, P10 stated value, 500,000 shares authorized, 200,000 shares issued Paid-in Capital in Excess of Stated Value - Ordinary Shares P 2,000,000 100,000 Accumulated Depreciation - Machinery and Equipment 120,000 Retained Earnings 400,000 Paid-in Capital in Excess of Par - Preference Shares 120,000 Preference Share Capital Subscribed, 1,000 shares 40,000 Merchandise Inventory 240,000 Machinery and Equipment 500,000 Preference Share Capital Subscription Receivable 14,000 10% Preference Share Capital, P40 par, 40,000 shares authorized 800,000 Pre-operating Costs 10,000 Instructions: Prepare the shareholders' equity section of the statement of financial position