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(AICPA) 7. Arp Corp.'s outstanding capital stock at December 15, 20x1, consisted of the following: . 30,000, 5% cumulative preference shares, par value P10 per share, fully participating as to dividends. No dividends were in arrears. 200,000 ordinary shares, par value P1 per share. On December 15, 20x1, Arp declared dividends of P100,000. What was the amount of dividends payable to Arp's common stockholders? a. 10,000 b. 34,000 c. 40,000 d. 47,500 (AICPA) 8. In 20x1, Elm Corp. bought 10,000 shares of Oil Corp. at a cost of P20,000. On January 15, 20x2, Elm declared a property dividend of the Oil stock to shareholders of record on February 1, 20x2, payable on February 15, 20x2. During 20x2, the Oil stock had the following market values: January 15... .P25,000 February 1 .................::.:.26,000 February 15 ........ . . . . . . . . .....:24,000 The net effect of the foregoing transactions on retained earnings during 20x2 should be a reduction of a. 20,000 b. 24,000 c. 25,000 d. 26,000 (AICPA)