AC 63A DIY Drill - Shareholders' Equity Part 3 Problem 1 Rensing, Inc., has P800,000 of 8% preference shares and P1,200,000 of ordinary shares outstanding, each having a par value of P10 per share. No dividends have been paid or declared during 2017 and 2018. As of December 31, 2019, it is desired to distribute P488,000 in dividends. Instructions How much will the preference and ordinary shareholders receive under each of the following assumptions: (a) The preference is noncumulative and nonparticipating. (b) The preference is cumulative and nonparticipating. (c) The preference is cumulative and fully participating. (d) The preference is cumulative and participating to 12% total. Problem 2 Foley Corporation has the following capital structure at the beginning of the year: Share capitalpreference 6%, P50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding P 300,000 Share capitalordinary, P10 par value, 60,000 shares authorized, 40,000 shares issued and outstanding 400,000 Share premiumordinary 110,000 Retained earnings 440,000 Total equity P1,250,000 Pr. 15-165 (cont) Instructions (a) Record the following transactions which occurred consecutively (show all calculations). 1. A total cash dividend of P90,000 was declared and payable to shareholders of record. Record dividends payable on ordinary and preference shares in separate accounts. 2. A 10% ordinary share dividend was declared. The average fair value of the ordinary shares is P18 a share. 3. Assume that net income for the year was P150,000 (record the closing entry) and the board of directors appropriated P70,000 of retained earnings for plant expansion. \" r'nncfrlmt fhn nnllihl confinn innnrnnrnnn all fhn ahnwn infnrmafinn