Exercise 1

Contributed Capital:
Share Capital
10% Preference Share, P100 par,
cumulative 10,000 shares authorized
4,000 shares issued and outstanding
Ordinary Shares, P20, 100,000 shares
authorized, 50,000 issued and outstanding
Ordinary Share Capital Subscribed
Additional Paid-in Capital:
Preference Share Premium
Ordinary Share Premium
Total Contributed Capital
Retained Earnings
Total Shareholders' Equity

Exercise 2
Contributed Capital
Share Capital
10% Preference Share, P40 par,
40,000 shares authorized, 20,000 shares issued
Preference Share Capital Subscribed
Less: PSC Subscription Receivable
Ordinary Shares, P10 stated value,
500,000 shares authorized, 200,000 shares issued
Additional Paid-in Capital
Preference Share Premium
Ordinary Share Premium
Total Contributed Capital
Retained Earnings
Total Shareholders' Equity

Exercise 3
Mar-01 Retained Earnings 400,000
Cash Dividend Payable 400,000
#
Apr-15 Cash Dividend Payable 400,000
Cash 400,000
#
Sep-01 Retained Earnings 800,000
Cash Dividend Payable 800,000
#
Sep-30 Cash Dividend Payable 800,000
Cash 800,000

Exercise 4
Apr-01 Retained Earnings 200,000
 Cash Dividend Payable
#
May-02 Cash Dividend Payable 200,000
Cash
#
Jun-01 Retained Earnings 600,000
Ordinary Share Capital Dividend Distributable
PIC from Ordinary Share Capital Dividend
#
Jul-15 Ordinary Share Capital Dividend Distributable 500,000
Ordinary Share Capital

Exercise 5
Oct-01 Retained Earnings 1,875,000
Ordinary Share Capital Dividend Distributable
PIC from Ordinary Share Capital Dividend
#
Nov-20 Ordinary Share Capital Dividend Distributable 750,000
Ordinary Share Capital
#
Oct-01 Retained Earnings 2,500,000
Ordinary Share Capital Dividend Distributable
#
Nov-20 Ordinary Share Capital Dividend Distributable 2,500,000
Ordinary Share Capital

Exercise 6
Mar-15 Retained Earnings 10,000
Cash Dividend Payable
#
Apr-15 Cash Dividend Payable 10,000
Cash
#
Jul-15 Retained Earnings 40,000
Property Dividends Payable
#
Property Dividends Payable 40,000
Investment in Pentagon Corp. Stocks
#
Oct-15 Retained Earnings 15,000
Ordinary Share Capital Dividend Distributable
#
Dec-01 Ordinary Share Capital Dividend Distributable 15,000
Ordinary Share Capital

Exercise 7
1. Non cumulative and non participating
2012 2013 2014 Dividends per share
 PSC 1,200,000 1,200,000 1,200,000
OSC 1,300,000 2,300,000 5,300,000
TOTAL 2,500,000 3,500,000 6,500,000

2. Cumulative and non participating

2012 Preference
Dividend in arrear
1,200,000 * 2 2,400,000
Dividend for the year
Required 1,200,000
Available 100,000 100,000
In arrears, end of 2012 1,100,000
2,500,000

Dividend per share

2,500,000/100,000 = 25

3. Non cumulative but participating

2012 Preference Ordinary
Regular dividends:
Preference 1,200,000
Ordinary 600,000
Balance - 700,000
Preference - 10/15 466,667
Ordinary - 5/15 233,333
1,666,667 833,333

Dividend per share

PSC OSC
1,666,667/100,000 = 16.67 833,333/500,000 = 1.67

4. Cumulative and participating

2012 Preference
Dividend in arrear
1,200,000 * 2 2,400,000
Dividend for the year
Required 1,200,000
Available 100,000 100,000
In arrears, end of 2012 1,100,000
2,500,000

Dividend per share

2,500,000/100,000 = 25

5. Non cumulative but participating up to an additional 8%

2012 Preference Ordinary
Regular dividends:
Preference 1,200,000
 Ordinary 600,000
Balance - 700,000
Preference - Maximum of 800,000 466,667
Ordinary 233,333
1,666,667 833,333

Dividend per share

PSC OSC
1,666,667/100,000 = 16.67 833,333/500,000 = 1.67

Exercise 8
1 Total Shareholders' Equity/ Shares issued and outstanding = Book Value per Share
5,000,000/200,000 = 25

2 Total Shareholders' Equity 5,000,000

Equity Identified with PSC -1,200,000
Equity Identified with OSC 3,800,000

Book Value per Share

PSC - 1,200,000/10,000 = 120
OSC - 3,800,000/100,000 = 38

Exercise 9
Earning per Share = Profit/ Outstanding Ordinary Share
a. 10,000/60,000 = P0.17
b. P70,000/60,000 = P1.17
c. P90,000/60,000 = P1.50
d. P150,000/60,000 = P2.50
e. P180,000/60,000 = P3.00

Exercise 10
Profit 750,000
Less: Dividend on Cumulative Preerence Share 200,000
Profit attributable to Ordinary Shares 550,000

Earning per Share

550,000/300,000 = 1.83
 400,000

1,000,000 1,400,000
200,000

150,000
200,000 350,000
1,950,000
250,000
2,200,000

800,000
40,000
-14,000 826,000

2,000,000

120,000
100,000 220,000
3,046,000
400,000
3,446,000
 200,000

200,000

500,000
100,000

500,000

750,000
1,125,000

750,000

2,500,000

2,500,000

10,000

10,000

40,000

40,000

15,000

15,000

vidends per share

1,200,000/100,000 = 12 2,300,000/500,000 = 4.6
1,300,000/500,000 = 2.60 5,300,000/500,000 = 10.60

Ordinary Total 2013 Preference

Dividend in arrear 1,100,000
2,400,000 Dividend for the year 1,200,000
Balance - to OSC

100,000 2,300,000

2,500,000 Dividend per share PSC

2,300,000/100,000 = 23

Total 2013 Preference Ordinary

Regular dividends:
Preference 1,200,000
1,800,000 Ordinary 600,000
Balance - 1,700,000
Preference - 10/15 1,133,333
700,000 Ordinary - 5/15 566,667
2,500,000 2,333,333 1,166,667

Dividend per share

PSC OSC
2,333,333/100,000 = 23.33 1,166,667/500,000 = 2.33

Ordinary Total 2013 Preference

Dividend in arrear 1,100,000
2,400,000 Dividend for the year 1,200,000
Balance - 600,000
Preference - 10/15 400,000
100,000 Ordinary - 5/15
2,700,000
2,500,000
Dividend per share
PSC OSC
2,700,000/100,000 = 27 200,000/500,000 = 1.6

Total 2013 Preference Ordinary

Regular dividends:
Preference 1,200,000
 1,800,000 Ordinary 600,000
Balance - 1,700,000
Preference - Maximum of 800,000 800,000
700,000 Ordinary 900,000
2,500,000 2,000,000 1,500,000

Dividend per share

PSC OSC
2,000,000/100,000 = 20 1,500,000/500,000 = 3

ue per Share
 Ordinary Total 2014
Dividend for the year
Balance - to OSC
1,200,000

1,200,000 3,500,000

OSC Dividend per share PSC

1,200,000/500,000 = 2.4 1,200,000/100,000 = 12

Total 2014 Preference

Regular dividends:
Preference 1,200,000
1,800,000 Ordinary
Balance - 4,700,000
Preference - 10/15 3,133,333
1,700,000 Ordinary - 5/15
3,500,000 4,333,333

Dividend per share

PSC OSC
4,333,333/100,000 = 43.33 2,166,667/500,000 = 4.33

Ordinary Total 2014

1,100,000 Dividend for the year
600,000 1,800,000 Balance - 4,700,000
Preference - 10/15
Ordinary - 5/15
200,000 600,000
200,000 3,500,000
Dividend per share
PSC
4,333,333/100,000 = 43.33
0,000/500,000 = 1.6

Total 2014 Preference

Regular dividends:
Preference 1,200,000
1,800,000 Ordinary
Balance - 4,700,000
Preference - Maximum of 800,000 800,000
1,700,000 Ordinary
3,500,000 2,000,000

Dividend per share

PSC OSC
2,000,000/100,000 = 20 4,500,000/500,000 = 9
 Preference Ordinary Total
1,200,000
5,300,000
1,200,000 5,300,000 6,500,000

OSC
200,000/100,000 = 12 1,200,000/500,000 = 10.6

Ordinary Total

600,000 1,800,000

1,566,667 4,700,000
2,166,667 6,500,000

166,667/500,000 = 4.33

Preference Ordinary Total

1,200,000 600,000 1,800,000

3,133,333
1,566,667 4,700,000
4,333,333 1,566,667 6,500,000

OSC
1,566,667/500,000 = 4.33

Ordinary Total
 600,000 1,800,000

3,900,000 4,700,000
4,500,000 6,500,000

500,000/500,000 = 9