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    06 Activity 1-InterAcct2

    Uploaded by

    Jomari Escarilla
    The document discusses journal entries for different share dividend scenarios for ACCA Company: 1) A 10% share dividend declaration when the share price is P130 2) A 20% share dividend declaration when the share price is P130 3) A P2 per share liquidating dividend declaration 4) Treating 5,000 treasury shares as a share dividend

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    06 Activity 1-InterAcct2

    Uploaded by

    Jomari Escarilla
    138 views2 pages
    The document discusses journal entries for different share dividend scenarios for ACCA Company: 1) A 10% share dividend declaration when the share price is P130 2) A 20% share dividend declaration when the share price is P130 3) A P2 per share liquidating dividend declaration 4) Treating 5,000 treasury shares as a share dividend

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    The document discusses journal entries for different share dividend scenarios for ACCA Company: 1) A 10% share dividend declaration when the share price is P130 2) A 20% share dividend declaration when the share price is P130 3) A P2 per share liquidating dividend declaration 4) Treating 5,000 treasury shares as a share dividend

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    138 views2 pages

    06 Activity 1-InterAcct2

    Uploaded by

    Jomari Escarilla
    The document discusses journal entries for different share dividend scenarios for ACCA Company: 1) A 10% share dividend declaration when the share price is P130 2) A 20% share dividend declaration when the share price is P130 3) A P2 per share liquidating dividend declaration 4) Treating 5,000 treasury shares as a share dividend

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    © All Rights Reserved
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    06_Activity_1

    The shareholders’ Equity section of ACCA Company on December 31 shows the following:

    Required: Provide the journal entries to be made under the following independent assumptions:
    1. The company declared 10% share dividends on the ordinary share when the market value
    per share is P130.
    2. The company declared 20% share dividends on the ordinary share when the market value
    per share is P130.
    3. The company declared and paid P2 per share liquidating dividends.
    4. Assume instead that the 5,000 treasury shares were declared as share dividends.
    Answer:
    1. Shares = 105,000 x 10% = 10,500 shares
    = 10,500 x P130 = 1,365,000
    Retained Earnings 1,365,000
    Ordinary Share Capital (10,500 x P50) 525,000
    Share Premium (10,500 x P80) 840,000

    2. Shares = 105,000 x 20% = 21,000 shares


    = 21,000 x P50 = 1,050,000
    Retained Earnings 1,050,000
    Ordinary Share Capital 1,050,000

    3.
    Outstanding Shares Issued 105,000
    Less: Treasury Shares (5,000) _
    Outstanding Shares 100,000
    ultiply: Per Share 2
    Retained Earnings 200,000

     Company’s Declaration
    Retained Earnings 200,000
    Share Dividends Payable 200,000

     Settlement
    Share Dividends Payable 200,000
    Retained Earnings 200,000
    4. Treasury Share as Share Dividend (5,000) = 300,000

     Company’s Declaration
    Retained Earnings 300,000
    Share Dividends Payable 300,000

     Settlement
    Share Dividends Payable 300,000
    Treasury Share 300,000

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