Corpn Exercises Problems On Ret Earnings Div 16mar21

WEEK 9 - 10 MODULE #6 - CORP RET EARNINGS & DIV (MARCH 08-20, 2021)
EXERCISES ON CORPORATE RETAINED EARNINGS AND DIVIDENDS DUE 24 MARCH 2021
EXERCISE #6.1 - BUGHAW CORPN:
JOURNALIZING DIVIDEND DECLARATION PART 1
EXERCISE #6.2 - GINTO CORPN
JOURNALIZING DIVIDEND DECLARATION PART 2

COMPUTING THE NUMBER OF OUTSTANDING SHARES
EXERCISE #6.3 - BERDE CORPN
ALLOCATING P120K TO VARIOUS PREF SHARES
EXERCISE #6.4 - PUTI CORPN
JOURALIZING DIVIDEND DECLARATION - PART 3

EXERCISE #6.1 - BUGHAW CORPN
GIVEN:
ON JUNE 15, 2018, THE BOARD OF DIRECTORS OF BUGHAW CORPN

DECLARED A P3 ORDINARY SHARE CASH DIVIDEND TO STOCKHOLDERS
OF RECORD ON JUNE 30, 2018 PAYABLE ON JULY15, 2018.
BUGHAW CORPN HAS 20,000 ORDINARY SHARES ISSUED AND OUTSTANDING.
REQUIRED:
DRAFT THE JOURNAL ENTRIES ON THE DATE OF DECLARATION AND

ON THE DATE OF PAYMENT. BRIEFLY EXPLAIN THE JOURNAL ENTERIES.
LEAVE PROBLEM AS IS. SOLVE IT HERE, DOWNWARDS
June 15 Retained Earnings 60000

Cash Dividend Payable 60000
To record the dividend declaration
P3 x 20,000 shares
July 15 Cash Dividend Payable 60000

Cash 60000
To record the payment of dividends
EXERCISE #6.2 - GINTO CORPN
GIVEN:
ON DEC 1 2018, THE BOARD OF DIRECTOS OF GINTO CORPN DECLARED

A P5 PER ORDINARY SHARE CASH DIVIDEND TO STOCKHOLDERS OF
RECORD ON DEC 15, 2018 PAYABLE ON DEC 31, 2018.
GINTO CORPN HAS 20,000 ORDINARY SHARES ISSUED. IT REACQUIRED

2,000 OF THESE ORDINARY SHARES IN THE MARKET AND HELD THEM
IN TREASURY.
REQUIRED:
A- DETERMINE THE NUMBER OF ORDINARY SHARES OUTSTANDING

B- DRAFT THE JOURNAL ENTRIES ON THE DATE OF DECLARATION
AND ON DATE OF PAYMENT.
A. Outstanding Shares
Total ordinary shares issued 20000
Treasury shares 2,000
Total ordinary shares outstanding 18,000
B.
December 1 Retained Earnings 54,000
Cash Dividend Payable 54,000
To record the dividend declaration
P3 x 18,000 shares
31 Cash Dividend Payable 54,000

Cash 54,000
To record the payment of dividends
EXERCISE #6.3 - BERDE CORPN
BERDE CORPN HAS THE FF CAPITAL STRUCTURE SINCE ITS

INCORPORATION ON JAN 1, 2016:
10% PREFERENCE SHARES, P100 PAR, 1,000 SHARES ISSUED

ORDINARY SHARES, P50 PAR, 8,000 SHARES ISSUED
ALTHOUGH PROFITABLE, BERDE CORPN DID NOT DECLARE DIVIDENDS

IN YEAR 2016 AND 2017. IN 2018, ITS BOARD OF DIRECTORS DECLARED
A CASH DIVIDEND OF P120,000
REQUIRED:
ALLOCATE THE P120,000 CASH DIVIDEND BETWEEN PREFERENCE

SHARES AND ORDINARY SHARES ASSUMING PREFERENCE
SHARES ARE:
1- NON-CUMULATIVE AND NON-PARTICIPATING

2- CUMULATIVE BUT NON-PARTICIPATING
3- NON-CUMULATIVE BUT FULLY PARTICIPATING
4- CUMULATIVE AND FULLY PARTICIPATING.
1- NON-CUMULATIVE AND NON-PARTICIPATING

Preference Ordinary Total
Preference-100,000 x 10% 10,000 10,000
Ordinary-Remaining 110,000 110,000
Total Dividends ₱ 10,000.00 ₱ 110,000.00 ₱ 120,000.00
Outstanding Shares 1,000 8,000 9,000
Dividends per Share ₱ 10.00 ₱ 13.75
2- CUMULATIVE BUT NON-PARTICIPATING

Dividends in arrears: 10,000 x 2 20,000 20,000
Current Dividends-100,000 x 10% 10,000 10,000
Ordinary-Remaining 90,000 90,000
Total Dividends ₱ 30,000.00 ₱ 90,000.00 ₱ 120,000.00
Outstanding Shares 1,000 8,000
3- NON-CUMULATIVE BUT FULLY PARTICIPATING

Regular Dividends:
Preference-100,000 x 10% 10,000.00 10,000.00
Ordinary- 400,000 x 10% 40,000.00 40,000.00
Balance- 70,000
Preference- 70,000 x 100/500 14,000.00 14,000.00
Ordinary- 70,000 x 400/500 56,000.00 56,000.00
Total Dividends ₱ 24,000.00 ₱ 96,000.00 ₱ 120,000.00
4- CUMULATIVE AND FULLY PARTICIPATING.

Dividends in arrears: 10,000 x 2 20,000 20,000
Regular Dividends:
Preference-100,000 x 10% 10,000.00 10,000.00
Ordinary- 400,000 x 10% 40,000.00 40,000.00
Balance- 50,000
Preference- 50,000 x 100/500 10,000.00 10,000.00
Ordinary- 50,000 x 400/500 40,000.00 40,000.00
Total Dividends ₱ 40,000.00 ₱ 80,000.00 ₱ 120,000.00
100,000
400,000
EXERCISE #6.4 - PUTI CORPN
GIVEN:
ON JAN 1, 2018, PUTI CORPN HAS THE FOLLOWING EQUITY ACCOUNTS IN

ITS LEDGERS:
6% PREF SHARES, P100 PAR, 2,000 SHARES ISSUED 200,000

ORDINARY SHARES, P50 PAR, 12,000 SHARES ISSUED 600,000
THE FOLLOWING EQUITY TRANSACTIONS TOOK PLACE IN 2018:
YR 2018
JAN 31 PAID THE ANNUAL DIVIDEND OF THE PREFERENCE SHARES.
THIS WAS PROPERTY RECORDED WHEN DECLARED ON
DEC 31 OF THE PREVIOUS YEAR.
MAR 31 DECLARED P2 PER SHARE CASH DIVIDEND ON THE ORDINARY

SHARES
APR 30 PAID THE CASH DIVIDEND DECLARED ON MARCH 31.
JUNE 30 DECLARED A 15% SHARE DIVIDEND ON THE ORDINARY

SHARES. THE MARKET PRICE OF THE ORDINARYSHARE
ON THIS DATE IS P60
JULY 31 ISSUED THE SHARE DVIDEND DECLARED ON JUNE 30.
SEPT 30 DECLARED A P2 PER SHARE CASH DIVIDEND ON THE ORDINARY

SHARES
OCT 31 PAID THE CASH DIVIDEND DECLARED ON SEPT 30
DEC 31 DECLARED THE ANNUAL DIVIDEND OF THE PREFERENCE SHARES

REQUIRED:
DRAFT THE JOURNAL ENTRIES TO RECORD THE FOREGOING TRANSACTIONS.
JAN 31 Dividend Payable 12000

Cash 12,000
P100 x 2000 shares * 6%
MAR 31 Retained Earnings 24,000

Cash Dividends Payable 24,000
P2 x 12,000 shares
APR 30 Cash Dividends Payable 24,000

Cash 24,000
JUNE 30 Retained Earnings 108,000

Ordinary Share Capital Dividends Distributable 90,000
Paid-in Capital from Ordinary Share Capital Distributable 18,000
P60 * 12,000 shares x 15%
JULY 31 Ordinary Share Capital Dividends Distributable 90,000

Ordinary Share Capital 90,000
P50 * 12,000 shares x 15%
SEPT 30 Retained Earnings 27,600

Cash Dividends Payable 27,600
P2 x (12,000 + 1,800 shares)
OCT 31 Cash Dividends Payable 27,600

Cash 27,600
DEC 31 Retained Earnings 12000

Dividend Payable 12,000
P100 x 2000 shares * 6%

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WEEK 9 - 10 MODULE #6 - CORP RET EARNINGS & DIV (MARCH 08-20, 2021)

EXERCISES ON CORPORATE RETAINED EARNINGS AND DIVIDENDS DUE 24 MARCH 2021

EXERCISE #6.1 - BUGHAW CORPN:

JOURNALIZING DIVIDEND DECLARATION PART 1

EXERCISE #6.2 - GINTO CORPN

JOURNALIZING DIVIDEND DECLARATION PART 2

EXERCISE #6.3 - BERDE CORPN

ALLOCATING P120K TO VARIOUS PREF SHARES

EXERCISE #6.4 - PUTI CORPN

JOURALIZING DIVIDEND DECLARATION - PART 3

EXERCISE #6.1 - BUGHAW CORPN

ON JUNE 15, 2018, THE BOARD OF DIRECTORS OF BUGHAW CORPN

BUGHAW CORPN HAS 20,000 ORDINARY SHARES ISSUED AND OUTSTANDING.

DRAFT THE JOURNAL ENTRIES ON THE DATE OF DECLARATION AND

LEAVE PROBLEM AS IS. SOLVE IT HERE, DOWNWARDS

June 15 Retained Earnings 60000

July 15 Cash Dividend Payable 60000

EXERCISE #6.2 - GINTO CORPN

ON DEC 1 2018, THE BOARD OF DIRECTOS OF GINTO CORPN DECLARED

GINTO CORPN HAS 20,000 ORDINARY SHARES ISSUED. IT REACQUIRED

A- DETERMINE THE NUMBER OF ORDINARY SHARES OUTSTANDING

LEAVE PROBLEM AS IS. SOLVE IT HERE, DOWNWARDS

31 Cash Dividend Payable 54,000

EXERCISE #6.3 - BERDE CORPN

BERDE CORPN HAS THE FF CAPITAL STRUCTURE SINCE ITS

10% PREFERENCE SHARES, P100 PAR, 1,000 SHARES ISSUED

ALTHOUGH PROFITABLE, BERDE CORPN DID NOT DECLARE DIVIDENDS

ALLOCATE THE P120,000 CASH DIVIDEND BETWEEN PREFERENCE

1- NON-CUMULATIVE AND NON-PARTICIPATING

LEAVE PROBLEM AS IS. SOLVE IT HERE, DOWNWARDS

1- NON-CUMULATIVE AND NON-PARTICIPATING

2- CUMULATIVE BUT NON-PARTICIPATING

3- NON-CUMULATIVE BUT FULLY PARTICIPATING

4- CUMULATIVE AND FULLY PARTICIPATING.

EXERCISE #6.4 - PUTI CORPN

ON JAN 1, 2018, PUTI CORPN HAS THE FOLLOWING EQUITY ACCOUNTS IN

6% PREF SHARES, P100 PAR, 2,000 SHARES ISSUED 200,000

THE FOLLOWING EQUITY TRANSACTIONS TOOK PLACE IN 2018:

MAR 31 DECLARED P2 PER SHARE CASH DIVIDEND ON THE ORDINARY

APR 30 PAID THE CASH DIVIDEND DECLARED ON MARCH 31.

JUNE 30 DECLARED A 15% SHARE DIVIDEND ON THE ORDINARY

JULY 31 ISSUED THE SHARE DVIDEND DECLARED ON JUNE 30.

SEPT 30 DECLARED A P2 PER SHARE CASH DIVIDEND ON THE ORDINARY

OCT 31 PAID THE CASH DIVIDEND DECLARED ON SEPT 30

DEC 31 DECLARED THE ANNUAL DIVIDEND OF THE PREFERENCE SHARES

DRAFT THE JOURNAL ENTRIES TO RECORD THE FOREGOING TRANSACTIONS.

LEAVE PROBLEM AS IS. SOLVE IT HERE, DOWNWARDS

JAN 31 Dividend Payable 12000

MAR 31 Retained Earnings 24,000

APR 30 Cash Dividends Payable 24,000

JUNE 30 Retained Earnings 108,000

JULY 31 Ordinary Share Capital Dividends Distributable 90,000

SEPT 30 Retained Earnings 27,600

OCT 31 Cash Dividends Payable 27,600

DEC 31 Retained Earnings 12000

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