SCORE:

I
PROFESSOR: j
problem #3
Entries for Cash Dividends

The dates of importance in conn ction with a cash dividend of P35, 000 on a
corporation's ordinary hares are Jan. 2, Jan. 22, and Feb. 1.

Required:
Journalize the entries required on each date.

Problem #4
Cash Dividends

Santiago Corporation's board of directors declared a P750,000 cash dividend on Sept . 1,

2014, payable on Oct. 1, to shareholders o.f record on Sept. 15.

Required:
Prepare all appropriate entries needed on the declaration, record and payment dates.
Problem #SB
Large Share Dividends

The Pallorina Corporation board of directors voted on Nov. 1, 2014,

share dividend, distributable on Dec. 31, to shareholders of reco
Pallorina's articles authorize the issuance of 200,000 shares of P40 pa
As of Nov. 1, 2014, 50,000 ordinary shares are issued and outstand
price of Pallorina stock on Nov. 1 is P85 per share.

Required: Prepare the en ries needed on the declaration, record and �

 NAME:
SECTION:

probl ·m #
Share

0
,0

· s is declared on ordinary shares.

i e ds is de lared on ordinary shares.
 NAME:
SECTION:

Problem #7
Divid nd

On Dec. 31, 201 , L. u. B Corporation's hareho lders' equity section of the

stat ment of financi I po ition follow :
Sh re Capita :
Ord ·na Sh res, P120 par, 2,000 shares authorized, P120,000
1,000 shares issued and outstanding
Share Pr emium 6,000
Total Share Capital P126,000
Reta ined Earnings 48,000
Tota Shareholders' Equity P174,000

On July 15, 2015, the board of directors declared a cash dividend of P12 per share,
which was paid on Aug. 1, 2015. On Dec. 1, 2015, the board decla.red a share dividend
of 10%, and the shares were issued on Dec. 15, 2015. Market value of the stock was
P144 on Dec. 1 and P168 on Dec. 15.

Required:

Prepare the journal entries for these dividend transactions.

DAME:
SECTION:
' SCORE:
PROF OR:
j
problem #8

M. Jacinto Corpor tion began year 201 WI.th th follow·,ng balan es in it shareholders'
equity accounts.

Ordinary Shares, Pl0 par, 500,000 shares authorized,

200,000 shares issued and outstanding P2,000,000
Share Premium-Ordinary 1,000,000
Reta ined Earnings 5,000,000
Total P8,000,000

All outstanding ordinary shares was issued for PlS per share when the corporation was
created . Prepare journal entries to account for the following transactions during year
2015.

Jan. 10 The board declared a P0.10 cash dividend per share to

shareholders of record Jan. 28.
Feb . 15 Paid t he cash dividend declared on Jan. 10.
Mar. 31
Decla red a 20% share dividend. The market value of the share is
P18 per share.
May 1 Distributed the share dividend declared on Maren 31.
July 1
Purchased 30,000 shares of treasury stock at P20 per share
Sept. 1
Sold 20,000 treasury shares at P26 cash per share. .
Dec. 1
Sold the remaining 10,000 shares of treasurv stork ::1+ n -, -- - '
sharP
NAME:
SECTION:

Problem#
f

I 4 ,0
p 2,
ri d , 00,

i
o -Ordinary, 10,000 shares at cost
ron,"\tnµrIEquit

20 s e fo llow· g events occurred related to shareholders' equ~ty :

a. So 3,000 s ares of the t reasury stock for P20 per share.

Declared and distributed as property dividend the investments in e quity sec ( ·es
e d by arasigan to ordi nary shareholders. The securities had a carrvi g a · e
P400,000. Its fair market value was P750,000 on the date of decla r ation, P
on t e date of record, and P756,000 on the date of distribution.
· Dec ared a 5% ordinary share dividend. Market value was P40 per share .
f. Declared and pa id e annua l cash dividends to preference sharehol

lequired: PrPn::H·n • - .
 NAME:
SECTION:

Probl m
r

Pl25,

ansactio ns affected sha r eho lde rs ' e

a d dare d on ordi nary share and iss ed i 5.

w s d cl r d and p id r n r es i

u h d p r in J n.
r hm h
h n

n If D . _1

4.
5.
6. How m pr r?
7 · What was t tot al
8 · What was th total r.
Keq uired :

1. How many shares of stock w ere out standing on Jan. 1, Mar. 31, and
assuming no other events rel ated t o shareholders' equity occurred?

2. What effect did the share dividends have on total shareholders' equit

3. Prepare the entries for these two events.

4. Why would a corporation declare a share split?

s. What would the second entry have been if the corporation had dt
share .dividend instead of a 2-for-1 share split?
 INAME:
SECTION:
I SCORE:
PROFESSOR:

Problem #13
Retained Earnings: Transactions and Statement

The shareholders' equity of C. Laguna Corporation at Jan. 1, 2015, appeared below:

Ordinary Shares, PS0 par, 200,000 shares authorized,

80,000 shares issued and outstanding P4,000,000
Share Premium 5,390,000
Retained Earnings 2,850,000

During 2015, the following transactions occurred:

June 7 Declared a 10% share dividend; market value of the

ordinary shares was P12Q per share.
28 Issued the share dividend declared on June 7.
Dec. 5 Declared a cash dividend of PlO per share.
26 Paid the cash dividend declared on Dec. 5.
31 Closed profit of P2,380,000 from the income
summary account to -retained earnings.
31 Closed the dividend accounts to retained earnings.

Required:

1. Prepare journal entries to record the 'foregoing transactions.

2. Prepare the retain ed earnings statement for 2015.
 I SECTION : LORE:
PROFE OR:
Problem #14
Changes in Retain d rnin

The equi y
h nd
Corpor i n an 1
n p:::iir '" i J. r him
ll w I ()

f
ry h
a h ri
n in p
ry
p
Ret ·n Earning
o al Shareh Ider ' Equity

As of Dec. 31, 20 14

Ordin a Sha es, P4 pa r valu e, 50,000 sha res

autho ri ed, 23,700 shares issued, 1,500 in the p 9 '
treasu
Share Premiu -Ordin ary
Tota l Share Ca pit al p
Reta ined Ea nin gs (PlS, 000 restrict ed)
Total
Less: Cost of treasu ry stock
Total Sha e alders' Eq uit y

The following nts occu rred during 2014:

Jan. 5 Deel c sh divid nd ; h re r i n.

ar. 20 d.

I Apr. 5
July 5
l 31
Aug. 14
Oc . 5 D . Op r h ; h r t.

Req uir d :
1. How many
2 . How much w s 1
3 . How much re in
4 . What w as th , pri u to · 7
s. How much profit did t rn uring 2014
SECTION

•robl m
:orr

,d ,,

r
din
r

lu nv
d ord in r E
f ordi a I

5, or tion d clar d a Pl per s a e c s

s ,v, nd wa not to be paid until Jan . 5, 2 , 0

.' ·---~- -.l=- " - " "

 ------·-- -· ·- ..-- ·- -·· ,-·- ·-·-··-- -··-·--
---- -

Dividend declared and distributed (share

dividend on Pl0 par ordinary shares,.
10,000 shares distributed) 240,000
Appropriated for Plant Expansion 15,000 283,000
Balance, Dec. 31, 2014 P128,500

Reta ined Earnings-Appropriated for Plant Expansion:

Balance, Jan 1, l014 PG0,000
Add: Appropriation during 2014 15,000
Deduct: (none) -0-
Ba lance, Dec. 31, 2014 P75,000

Required:
Examine the Gonzaga Corporation's statement of retained earnings for 2014 an1
prepare in journal form all the entries that affected the Retained Earnings account fa
the year. Dates may be om itted from your entries. Prepare both declaration an
distribution entries for any dividends.
\ NAME:
SECTION:
I SCORE:
PROFESSOR:

Problem #19
Dividends per Share
. · · t has t he following o utst anding
Diaz Corporati n, a distributor of ex rc1 e equ1pmen , 5 d 40 000 h
shares : 1 000 shares of 2% cumu lative preference shares, P7 par_an t h' f 11s a~es
· · f' t f years of operation s, e o ow ing
of PlO par ordinar shares. Du ri ng its 1rs our .
· · f' P22 SOO· second yea r, P28,800; third
amounts were distributed s d1v1dends: 1rst ye~ r, , ,
year, P40,100; fourth year, P77,000.

Required: Calculate the dividends per share on ea~h class of shares for the fir 5t year.
f(tf ~rence o,rJ.,r,J{--f
f \· 2<
r 1- <,o
p 1·u-< P· 'lu
rrr rt·tr

Problem #20
Dividends per Share

Manalo Inc., developing mobile commerce applications, has the fo llowing outsta nding
shares: 25,000 shares of 1% cumulative preference shares, P40 par and 50,000 shares
of P120 par ordinary shares. Dur-1ng its first four years of operations, the fo llowing
amounts were distributed as dividends: first year, P17,500; second year, Pl0,500; th ird
year, P25,000; fourth year, P60,000. 1 (bo \.{l)o
tr OOo ro oo o
Requ ired: Calcu late the divi dend s per share on each cl ass of sh ares for the first year.
f (t { Cft'() GC Q{d\n~r'/
P . qo P . \(

.,
 SECTION:
ISCORE:
PROFESSOR: I
Problem #21

R. San Pedro Corporatio~ has paid all required preference dividends through Dec. 31,
20lO. Its outstanding shares consists of 10,000 shares of P125 par value ordinary
shares and 4,000 · shar~s of 6%, P125 par value preference shares. During five
successive years, the corporation's dividend declarations were as follows:

2011 PSS,000
2012 52,S0ff
2013 7,500
2014 15,000
2015 67,500

Compute the amount of dividends that would have been paid to each class of shares in
each of the last five years assum ing the preference shares is:

a. Cumulative.
b. Noncumulative.
 aei -cum ulative and non-participating.
aei u ulative and non-participating w it one-yea

a no -cu mulative and participating.

a e is cu ulative and participating with no dividends in ar ea
s a e is cum ulative and participating with t hree ea rs i · e s
 .,

l NAME:
SECTION:
I SCORE:
~ROFESSOR: I
Problem #23
Dividends on Preference and Ordinary Shares

Lord Aguilar Corp. plans to d dare and distribute a dividend in December 2015 . There
are 20,000 shares of 7% preference shares, par value PSO, and 400,000 out stand ing
ordinary shares Pl par val ue. No divid end was paid in the previous year.

Requ ired : Determine the amount of the dividends that shou ld be paid to the
preference and ordinary shareholders if the preference shares

1. cumu lative and nonparticipating and the total amount that the board of directors
has specified for dividends is (a) 'Pl00,000, (b) P168,000, (c) P200,000.

2. cumu lative and participating and the total amount that the board of directors has
specified for dividends is (a) Pl00,000, (~) P168,000, (c) P200,000.
 NAME: SCOR .
SECTION : PROFE SOR:

Probl em #24
Dividends n r

Th n out t nding of R. De la Calzada, Inc. on Dec. 31,

2 15

QPr fer nc hare , P10 par, cumu l tive,

articipatin , 40,00 shar s authorized, 10,000
hare i ued and outstanding Pl00,000
Ordina hares, P2 par, 10,000,000 shares authorized,
50,0 shares issued and outstanding 500,000
a l Preference and Ordi nary Shares P600,000

, equired :

:ale late the amount of dividends received by preference and ordina ry shareholders,
espec ively, under each of the following assumptions:

Preference dividends for 2014 are in arrears. On Dec. 31, 2015, R. Dela Ca lzada
,·
declared a tota l dividend of P56,000.

o d ·vidends are in arrears. On Dec. 31, 2015, R. Dela Calzada declared a total
divid end of P66,000.

Preference dividends for 2013 and 2014 are in arrears. On Dec. 31, 2015, R. Dela
. Ca lzada declared a total dividend of P88,000.
 •
I
NAME:
I SECTION :
R.
I
Problem #25
I Preferenc and Ordin ry har iv' nd

Th Ja rd i lin or a i n h d th f !lowing sh res outstand ing from 201 t hrough

2016 :

h re , PSO par, 8% cumulative, 10,000 shares

riz d, i u d and out tanding
Ordinary hare , PS par, 200,000 shares authorized,
i ued and ou tstanding

The corporat ion pa id P30,000, P30,000, P94,000, and P130,000 in d'vidends du ri ng

2013, 20 14, 2015 and 2016, respectively.

Req uired :

l. Det erm ine the dividend per share and the total dividends paid to ordinary
sha reho lders and preference shareholders in 2013, 2014, 2015 and 2016 .

2. Perform the same com putations, with the assumption that the preference share
was noncumu lative.
 SECTION :

Problem #26
f incorporation
· 0 hares of
au
1
0

n 0 r o
ry_ r ,.,

din ry h r s on May P20 p

b us d for an employee bo nus pfa, .

f P · per share o ordin ary s are aide s

s eh lders on July 1. The pre e e c s is
a ·cipa jng. The dividend will be distri uted o g. .

cas on Aug. 1.

fS fl o preference shareholders a 10% s a e di

0 iden d declaration, preference sha res

nn u I profi fo the ye r b
p of, f o th I com Sun m r

t an ,r r .., .
tNAIVI
SECTION :
;
I SCORE ~
~ROFESSOR:

Problem #2 7
Shareholders' Eq uity: Transactions and Statement

The shareholders' equity section of L. Genera les Co rpo ration at Dec. 31, 201 3, follows:

Ordinary Shares, Pl0 par, 100,000 shares aut horized, 25,000

shares issued, 4,000 shares are in th e treasury P250,000
Share Premium 325,000
Share Premium -Treas ury 12,000
Retained Earnings 198,000
Total P785,000
Less: Treasury Stock, 4, 000 shares at cost 100,000
Total Sh areholders' Eq uity P685,000

Note: A portio n of ret ained ea rn ings is restrict ed due to th e purchase of treasu ry stock.

The f ollowing transa ctio ns affecting shareholders' equity occurred during 2014 :

Jan. 8 Issued 10,000 shares of previously unissued ordinary shares for P26 cash
per share.
M ar. 12 Sold all of the treasury shares for P27 cash per share.
June 30 Declared a 6% share dividend on all outstanding ordinary sha res. The
market value of the share was P30 per share.
Ju ly 10 Issued the share dividend declared on June 30.
Oct. 7 Acquired 1,100 ordinary shares for the treasury at P28 per share .
Dec. 18 Declared a cash dividend of P2.00 per outstanding ordinary share,
payable on Jan. 9 to shareholders of record on Dec. 31.
31 Closed the income summary account, with profit of P183,000 to
reta ined earn ings.
31 Closed t he divi dend accounts to retain ed earnings.

Required:

1. Prepare j ourna l entries to record ~he fo regoing t r nsaction s.

2. Prepa re th e st atement of changes in sha rehol ders' equity for 2014.
·ion

i r ' 0 z non J n. 1, 20

0 P6,00 , 00
00 00
, 00,000

4 n h' r inf rm n r I ing to shareholders' equity

acquired for cas h 5,000 shares of its ordinary hares for Pl 0

d f or cash 3,000 shares of its treasury stock for P140 per s are .

ecl ared a cash dividend of P20 per share, payable July 5, to

rd on July 1.

~cl ared a 2-for-1 split and changed the pa r value fro m PlOO to
ires were issued for the share split.

res were issued in exchange for a second hand equipment . T e

· cost P400,000, was carried by the previous owner at a book
1d w as recently appraised at P260,000.
)1 730,000.

ies to record the transactions.

) lde rs' equity section of th e st at ement of fin ancial posit ion on

I
I [LJN~A~M~E:.:.,
: - - -- - - - - - -t ~SC:!:
O~R~E:: ___ __ _ _ _ _ _ _ _ j
LsECTION: PROFES OR : -
I
problem #29
Share Transactions; Sharehold r ' Equity Section of the Statement of Fina n cial
Position

The following sel cted a ounts app d in h ledger of M . Penaflor Co r poration on

July 2013, th e beginning of th urren I y ar:

4% Preferenc Sha res, PS0 p r, 10,000 sh r s

authori zed, 7, 000 sha re i sued P350 ,000
Share Premium -Preference 28,000
Ordinary Shares, P20 par, 50,000 shares auth orized,
25,000 shares issued 500,000
Share Premium-Ordinary 90,000
Retained Earnings 537,000

During the year, the corporation completed a number of transact io ns affecting t h e

shareholders' equity. They are summarized as follows :

a. Purchased 2,000 shares of treasury-ordinary for PSS,000.

b. Sold 500 shares of treasury-ordinary for P16,000.
c. Issued 5,000 ordinary shares at P30, receiving cash.
d. Sold 1,000 shares of preference 4% share at P52.50.
e. Sold 600 shares of treasury-ordinary for PlS,600.
f. Declared cash dividends of P2 per share on preferen ce sha res and Pl per share o n
ord inary shares.
g. Pa id the cash dividends.
h. The board of directors authorized the appropriation necessitated by the hold i ng of
treasury stock.

Required :

1. Journalize th e entri es to record the transactions.

2. Prepare the statement of changes in sharehold rs ' equity for the year ended June
30, 2014. The profit for the ye ar w as Pl65,000.
3. Prepare the shareholders' e . 't .
June 30, 2014. qu, Y section of th e statem ent of fi nancial position as o i
 t AME:
~ECTION:

problem #29
share Transact ions; har hold rs' quity Sec ion of the tatement <
Position

The following sele ted counts pp r d in th ledger of M . Pena

I
Jul 2013, the beginning of h ur nt fisc I y ar:
I 4% Preference Shar , PS0 par, 0,000 shares
p~
I a thorized, 7,000 shar s issued
Share Premium -Preference
Ordinary Shares, P20 pa r, 50,000 shares authorized,
25,000 sha res issued
Share Premium -Ordinary
Retai ned Earnings

During th e year, the corporation completed a number of trans 2

shareho lde rs' equity. They are summarized as follows:

a. Purchased 2,000 shares of treasury-ordinary for PSS,000 .

b. So ld 500 shares of treasury-ordinary for P16,000.
C. Issued 5,000 ordinary shares at P30, receiving cash.
d. Sold 1,000 shares of preference 4% share at P52.50.
e. Sold 600 shares of treasury-ordinary for PlS,600.
f. Declared cash divi dends of P2 per share on preference sha r es
ord inary shares.
g. Paid the cash dividends.
h. The board of directors authorized the appropriation necessit2
treasury stock.

Requ ired :

1. Journal ize the entries to reco rd the tran sa ction s.

2. Prepare the st ateme nt of changes in shareholde rs' e q uity f

0
30, 2014. The profit for th e yea r w as Pl GS,000.

3. ~~~~a;;, ~~el~~areholders' equity sectio n of t he statem nt of

\ NAME:
SECTION :
I SCORE·
PRO SSOR:

Problem #30
Entries for I c d rp r n tion

Bae h room f .,x ur . Th sh ar holders' equity

ace follow s:

, 25 00,000 shar s
rized , S ,0 0 h r s i su d
Pl,250,000
250,000
ar P e ium
p r pri ati n for Plant Expansion 150,000
p r pri ation f r Treasury Stock 80,000
et ined E rnings 725,000
rea u Stoc , 2,500 shares, at cost 80,000

T e o ll o ing se lected transacti ons occurred during the year :

Jan. 20 Received donated land with a fair market value of Pl00,000.

29 Paid cash dividends of Pl per share on the ordinary shares. The
dividend had been properly recorded when declared on Dec. 30 of the
preced ing fiscal year for P47,500.
Mar. 3 Sold all of the treasury stock for P95,000.
Apr. 1 Issu ed 6,000 ordinary shares for P240,000.
July 1 Declared a 2% share dividend on ordinary shares, to be capitalized at
t he market price of the stock, which is P40 a share.
Ag. 11 Issued the certifi cates for the dividend declared on Ju ly 1.
Nov. 20 Purchased 2,000 shares of treasury stock for P72,000.
Dec. 21 The board of directors authorized an increase of the appropriation for
plant expansi on by PS0,000.
21 Declared a PO.SO per share dividend on ordin ary shares.
21 Decreased the ap propriation for treasury stock to P72,00Q.
31 Closed the cred 't balance of the income summary account, P169,400.
31 Closed the two dividends accounts to Retained Earn ing .

Requ ired :

1. Enter the Jan . 1 bal ances i T-accounts for the shareholders' quity accounts.
2. Journalize and pos he t ransaction s.
3 · Prepare the sha reho lde rs' q ity section of th e stat ment of inancial position as of
Dec. 31, 2014.
I I ~
SE(TtON :
E:
I SCORE:
PROFESSOR: l
I
Problem #31
Comprehensive Sharehold ers' Equity Transacti ons

The shareholders' equity of th e Rodriguez Corporation on June 30, 2013 , is shown

I below :

I Share Capi t al
Ordin ary Sha res - P6 par va lu e,
I 1,000,000 shares aut hori ze d I

250,000 sha res issued and outst andin g Pl,500,000

Sha re Prem ium-Ordinary 820,000
Total Sha re Cap ital P2,320,000
Reta ined Ea rn ings 970,000
Tota l Sha reholders' Equity P3,290,000

Transactions for the next fiscal year were as follo.ws:

a. The board of directors declared a 2-for-1 sha re split.

b. The board of directors obtained authorization to issue 50,000 shares of Pl00 par
value, 6 % non-cumulative preference shares.
C. Issued 12,000 ordinary shares for a building appraised at P96,000.
d. Purchased 8, 000 sh ares of the corporation's ordinary shares for P64,000.
e. Issued 20,000 preference shares for Pl00 per share .
f. Sold 5,000 shares of treasury stock for P35,000.
g. Declared cash dividends of PG per share on preference shares and P.20 per share
on ordinary shares.
h. Date of record.
i. Pa jd the preference and ordinary shares cash dividends.
j. Declared a 10% share dividend on ordinary shares. The market value was Pl0 per
share. The share dividend is distributable after the end of t he fi sca l yea r.
k. Profit for the year w as P340,000.

Required :

1. Prepare the journal entries to record t he t ra nsactions.

2. Prepare the statement of retained earn ings for t he year ended June 30, 2014.

3. Prepare the shareholders' equ ity section of t he st ate ment of fin anci al posit ion as at
June 30, 2014.
'
f
1sc I ea e e s al s:

C.
d.

i.
j. D

r' h

·qui d;

1. Pr p r :!J ·u rn l t. I f

2. Prepar fl r { h 0, 2014.
" " ..-- h -:J '- he,
I
quity
-'--L,_
J em · inanciat. positio,
 bAME:
~ECTION: I
SCORE:

Problem #36
PROFESSOR:
I
The shareholders' equity t.
sec ion of Dela Pena, Inc. as at Dec. 31, 2014, is shown below :
Ordinary Sharp
es, 20 par; sootooo shares authorized 1· P 4,000,000
2 00,000 shares issued and outstanding
Share Premium
3,600,000
Retained Earnings
S,700,000
Total Shareholders' Equity
P13,300,000

During the month of Jan. 2015, the following events occurred :

/

Jan. 12 The board of directors declared a 2-for-1 ordinary shares split. At the t ime of
the split, the market price was P120 per share.
Jan. 20 A 5% share dividend was declared and issued by the board of directors. At th e \ 10 0
time of the declaration, the market price of the stock was PSS per share. ~t p ~9'foo
'O ~~
Jan. 22 The corporation repurchased S,000 shares of its ordinary shares at PS4 per
share. Re 1,:=to ooo
_ vro v oo
Jan. 28 The board of directors declared a cash dividend of P0.4S per share, payable on
February 28. \Ui I~ Ct l'\"O
!. D l( & f11l
Jan. 30 A 20% share dividend was declared and issued. At the time of the declaration,
the market price of the stock was P52 per share .

Jan . 31 The profit for the month amounted to P360,000.

Required: Provide the answers to each of the following questions:

,~ 100 000
1. After the share split on Jan. 12, what was the amount of totaf shareholders' equity?

2. After the share split on Jan. 12, what was the balance in t he ordinary shares
account? lJ 000 ooo
I

3. After the share dividend on Jan. 20, what's the balance in the retained earnings
account? Lt l,00 000
4. After the share dividend on Jan. 20, what's the amount of the firm's total net
assets? \~ 100 000
s. After the treasury st ock purchase, by how much did the firm 's assets increase or
decrease, if any? vee- re~ic in ii>\~\ ~uct ~oc;l ~~ 0 ; ty ? OOc>
110
6. Prepare the journal entry for the share dividends on Jan . 30 . llE io,o ooo
-.! D ~~o ooo
7. What was the balance in t he retained earnings account at the end of Ja nuary?
~ u)_,
J(\)
 0

2 0 P
60 ,00
3,000,000 9,
7,000,000
400,000

_he: -e as re tire d d uring the year and pro i as P ,3

250,000.
 ~ AME:
iecTION:
OR:
problem #38
Book Value per h r

Given th
q ity f th or or I n' m n of
finan i I p w, wh · i th v lu p .r h r f r n
th e ordinar

ha r
Pref en e har 5_ 1
umul tf e, 1 ,0 o
SOO shar i ued and ut anding P so 000
Ordinar h r s-Pl0 p r, 100,000
sha res authorized, 40,000 shares
issued and out tanding P400,000
Share Prem ium-Ord inary 516,000 916,000
Tota l Sha re Capital P 966,000
Reta ined Earn ings 275,000
Tota l Sha reholders' Equity Pl ,241 000

The preference shares has a liquidation value of P104 per share,

and current year' s dividends are in arrears.

Problem #39
Book Value per Share

Domingo, Inc. was organized on Jan. 2 with the following cap it al stru ture :

10% Cumulative Preference Shares, par valu e

Pl,000 and liquidation value Pl,050;
authorized, issued and outstanding 1,000 Pl, ,00
shares
Ordinary Shares, par value P250; aut horized
100,000 shares; issued and outstanding
10,000 shares I 00,00

Domingo's profit for h fi rst year ending D c. 31 w s P4,500 .0 0, but no dividen ds

were declared.

Required :

1. What is the book valu e per pref rence share at Dec. 31?
l 2. What is the book value per ord inary share at Dec. 31?
I NAME:
SECTION:
ISCORE:
PROFESSOR: J
Problem #40
Book Value per Share
· I Iling on a stock exchange at Pl 70
Lusterio Corporation's ordinary share is current Y se .. h d th foll ·
f . cial pos1t1on s owe e owing
per share, and a recent statement of man
information :
Shareholders' Equity

Preference Shares, 5%, P? par value, 1,000 shares

Pl00,000
authorized, issued and outstanding
Ordinary Sha res, P? par value, 4,000 shares
160,000
authorized, issued and outstanding
300,000
Reta ined Earnings
P560,000
Total Shareholders' Equity

Required:
1. What is the market value of the ordinary shares? l'1 ()

2. What are the par values of the preference shares and ordinary shares? 100 ; 4-0
3. If no dividends are in arrears, what are the book values per share of the preference
and ordinary shares? f IO( i PII~ · 1(
4. If two years' preference dividends are in arrears, what are t he book values per
share of the preference and ordinary shares? f' I\! ; p \\\ · '2,(

5. If two years' preference dividends are in arrears and the preference shares has a
liquidation value of P110 per share, what are the book values per share of the
preference and ordinary shares? P\'1,( , P\0'6. 7.(