Accounting Chapter 9
Accounting Chapter 9
Accounting Chapter 9
BSA 1-2
CHAPTER 9
Operations, Dividends, Book Value and Earnings per Share
Exercises 9-1
Contributed Capital
Share Capital:
10% Preference Share Capital, P100 par, cumulative, 10,000 shares authorized,
4,000 shares issued and outstanding P400,000
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 1,600,000
Additional Paid-In Capital:
Preference Share Premium 150,000
Ordinary Share Premium 200,000 350,000
Total Contributed Capital 1,950,000
Retained Earnings 250,000
Total Shareholders’ Equity 2,200,000
Exercises 9-2
Contributed Capital:
10% Preference Share Capital, P40 par, 40,000 shares authorized,
20,000 shares issued and outstanding P800,000
Preference Share Capital Subscribed P40,000
Less PSC Subscription Receivable 14,000 26,000
Ordinary Share Capital, P10 stated value, 500,000 shares authorized,
200,000 shares issued and outstanding 2,000,0
00
Paid-in Capital in Excess of Par – Preference Shares 120,000
Paid-in Capital in Excess of Stated Value – Ordinary Shares 100,0
00
Total Contributed Capital P3,046,0
00
Retained Earnings 400,0
00
Total Shareholders’ Equity P3,446,0
00
Exercises 9-4
Apr. 1 Retained Earnings 200,00
0
Dividends Payable 200,000
Cash 200,000
1. 2014
125,000 sh x P25
Building 500,500
2015
Cash 531,250
14 Cash 1,000,000
Ordinary Share Capital Subscription Receivable 1,000,000
P2,500,000 x 40%
P2,500,000 x 60%
Contributed Capital:
3.
BCD Corporation
Statement of Changes in Shareholders’ Equity For the Year
Ended December 31, 2014
Ordinary Ordinary
Share Share Retained
Capital Premium Earnings Total
Issuance of Ordinary Share
125,000 shares@P25 2,500,000 625,000 3,125,000
62,500 shares @ 30 1,250,000 625,000 1,875,000
25,000 shares @ 32 500,000 300,000 800,000
Declaration of cash dividends ( 531,250) ( 531,250)
Profit for 2014 750,000 750,000
Balances, December 31, 2014 P 4,250,000 P 1,550,000 P 218,750 P6,018,750
9-7. B
9-8. C
9-9. D
9-10. B
Total Shareholders’ Equity P4,100,000
Less Equity identified with preference shares:
Liquidation value = 5,000 sh x P120 P 600,000
Dividends in Arrears= P500,000 x 10% x 5 yrs 250,000 850,000
Equity identified with ordinary shares P3,250,000
Book Value Per Share:
Preference = P850,000/5,000 sh P 170.00
Ordinary = P3,250,000/50,000 sh P 65.00
9-18. C
Total Share Capital P1,075,000
Preference Share Premium 30,000
Ordinary Share Premium 50,000
Ordinary Share Capital Dividends Distributable 105,000
Dividends Payable 40,000
Paid- In Capital from Share Capital Dividend 63,000
Total Contributed Capital P1,363,000
9-19. A
9-20. D
Total Contributed Capital P1,363,000
Retained Earnings Appropriated for Contingencies 150,000
Retained Earnings Appropriated for Bond Retirement 100,000
Retained Earnings – Unappropriated 450,000
Total Shareholders’ Equity P2,063,000