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Problem 1: Solution: Retained earnings at the beginning 2,000, Less: Property dividend at fair value 1,000, Treasury stocks (50,000 shares x 10) 500, Add: Net income 2,500, Retained earnings at the end 3,000, Problem 2: Requirement (a) Requirement (b) Outstanding shares P 300,000 Retained earnings (15k x P20) Multiply by: Dividends declared 5% Less: Share Capital (15k x P10) Number of shares declared as dividends 15,000 Share premium Multiply by: Par value per share P 10 Share Capital P 150, Problem 3: Outstanding share P 330, Multiply by: Stock dividend 1 Total 330, Less: Purchased share 100, Total 230, Add: Reissued share 50, Total 280, Multiply by: Declared share split 2 Outstanding Ordinary Share P 560, Problem 4: Solution: Retained earnings P 250, Less: Gain on asset distribution 50, Net Change 200, Problem 5: Solution: Retained Earnings Beg. P 2,500, Solution:
Less: Stock dividends preference 1,050, Stock dividends ordinary 600, Cash dividends preference 210, Cash dividends ordinary 60, Retained Earnings End. 580, Preferred stock 2,150, Ordinary stock 1,200, Less: Treasury shares 110, Total Shared Equity 3,820, Problem 6: Solution: Outstanding shares beginning (3,000,000 / P50 par) 60,000 shares Share capital beginning 3,000, Add: Share dividend (60,000 shares x 15% x P50) 450, Share capital outstanding 3,450, Problem 7: Solution: Retained earnings (2.5M - 2M) 500,000 Share premium per book Inventory 500,000 Reduction of par Retained earnings (8.5M - 7M) 1,500,000 Contribution of cash from shareholders Accumulated depreciation 1,500,000 Elimination of deficit (3M + 500k + 1.5M) Cash 4,000,000 Adjusted share premium Share premium 4,000, Share capital [100k (P25 - P50)] 2,000, Share premium 2,000, Share premium (3M + 500k + 1.5M) 5,000, Retained earnings 5,000, 4,600, Problem 9 1,000, Problem 10 600, Problem 11 Problem 8
Requirement (c) P 300,000 Share capital - 2013: 150,000 1st quarter P 800, P 150,000 2nd quarter 900, 3rd quarter 1,000, 4th quarter 1,100, Add: Additional shares 300, Total retained earnings P 4,100,
- 700,
- P 1,750,
- 2,000,
- from shareholders 4,000,
- (3M + 500k + 1.5M) -5,000,
- P 2,750,
