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Chapter 9 Exercise

The document contains contributed capital and shareholders' equity information for a company as of a certain date, including details on preference share capital, ordinary share capital, share premiums, and retained earnings. It also includes journal entries recording various transactions impacting retained earnings and dividends payable accounts over multiple periods.

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Kaila Clarisse Cortez
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176 views

Chapter 9 Exercise

The document contains contributed capital and shareholders' equity information for a company as of a certain date, including details on preference share capital, ordinary share capital, share premiums, and retained earnings. It also includes journal entries recording various transactions impacting retained earnings and dividends payable accounts over multiple periods.

Uploaded by

Kaila Clarisse Cortez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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E 9-1

Contributed Capital:
10% Preference Share Capital, P100 par, cumulative, 10,000 shares
authorized, 4,000 shares issued and outstanding P 400,000
Ordinary Share Capital, P20 par, 100,000 shares authorized,
50,000 shares issued and outstanding 1,000,000
Ordinary Share Capital Subscribed – 10,000 shares 200,000
Preference Share Premium 150,000
Ordinary Share Premium 200,000
Total Contributed Capital P1,950,000
Retained Earnings 250,000
Total Shareholders’ Equity P2,200,000

E 9-6
Mar. 15 Retained Earnings 10,000
Dividends Payable 10,000
2,000 sh x P5 = P10,000

Apr. 15 Dividends Payable 10,000


Cash 10,000

July 15 Retained Earnings 40,000


Property Dividends Payable 40,000
2,000 sh x P20

Property Dividends Payable 40,000


Investment in Pentagon Corp. Stocks 40,000

Oct. 15 Retained Earnings 15,000


Stock Dividends Distributable 15,000
2,000 sh x 30% x P25

Dec. 1 Stock Dividends Distributable 15,000


Ordinary Share Capital 15,000

E 9-8
1. P2,500,000 / 200,000 shares P12.50

2. Total Shareholders’ Equity P2,500,000


Equity identified with preference shares (10,000 sh x P120) 1,200,000
Equity identified with ordinary shares P1,300,000

BV/share: PS – P120.00; OS – P13.00


E 9-9
a. P10,000/60,000 = P.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

E 9-10
Profit P450,000
Less earnings identified with preference share capital 200,000
(20,000 sh x P100 x 10%)
Earnings identified with ordinary shares P250,000

Earnings per share P250,000/300,000 = P.83

P 9-1
1.
2009
Jan. 2 Cash 1,875,000
Ordinary Share Capital 1,250,000
Ordinary Share Premium 625,000
125,000 sh x P15

Mar. 2 Cash (62,500 sh x P20) 1,250,000


Ordinary Share Capital 625,000
Ordinary Share Premium 625,000

Mar. 31 Land 125,000


Building 312,500
Ordinary Share Capital 250,000
Ordinary Share Premium 187,500

Dec. 31 Income Summary 750,000


Retained Earnings 750,000

31 Retained Earnings 531,250


Dividends Payable 531,250
125,000 + 62,500 + 25,000 = 212,500 sh x P2.50

2010
Jan. 31 Dividends Payable 531,250
Cash 531,250

Feb. 14 OSC Subscription Receivable (50,000 x P25) 1,250,000


OSC Subscribed 500,000
Ordinary Share Premium 750,000
14 Cash 500,000
OSC Subscription Receivable 500,000
P1,250,000 x 40%

Mar. 15 Cash 750,000


OSC Subscription Receivable 750,000
P1,250,000 x 60%

15 OSC Subscribed 500,000


Ordinary Share Capital 500,000

Dec. 31 Income Summary 1,000,000


Retained Earnings 1,000,000

31 Retained Earnings 262,500


Dividends Payable 262,500
212,500 + 50,000 = 262,500 x P1

31 Retained Earnings 656,250


Stock Dividends Distributable 262,500
PIC from Stock Dividend 393,750
262,500 x 10% x P25 = 262,500
2.
Contributed Capital:
Ordinary share Capital, P10 par, 500,000 shares authorized,
212,500 shares issued and outstanding P2,125,000
Ordinary Share Premium 1,437,500
Total Contributed Capital P3,562,500
Retained Earnings 218,750
Total Shareholders’ Equity P3,781,250
3.
BCD Corporation
Statement of Changes in Shareholders’ Equity
For the Year Ended December 31, 2010

Ordinary Ordinary PIC from


Share Share Stock Retained
Capital Premium Dividend Earnings Total
Balances, January 1, 2010 P2,125,000 P1,437,500 P 218,750 P3,781.250
Subscription & issuance of 5,000 500,000 750,000 1,250,000
shares@P25
Declaration of cash dividends ( 262,500) ( 262,500)
Declaration of 10% stock 262,500 P393,750 ( 656,250)
Dividends
Profit for 2010 1,000,000 1,000,000
Balances, December 31, 2010 P 2,887,500 P2,187,500 P393,750 P 300,000 P5,768,750

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