Questions:

1.If the preference shares are cumulative and fully participating, how much is the dividends to be allocated to ordinary shareholders?

2.If the preference shares of OTSO CORP are cumulative and participating only up to 15%, how much is the dividends to be allocated to ordinary shareholders?

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Use the following information in answering the next item(s): OTSO CORP. declared P1,500,000 cash dividends to its preference and ordinary shareholders out of its unappropriated retained earnings in 2018. No dividends have been declared since 2016. OTSO's shareholders' equity before the dividend declaration is as follows: 10% Preference share capital (P300 par) Ordinary share capital (150 par). Retained earnings Ordinary share premium P3,000,000 1,500,000 4,000,000 200,000 Use the following information in answering the next item(s): OTSO CORP. declared P1,500,000 cash dividends to its preference and ordinary shareholders out of its unappropriated retained earnings in 2018. No dividends have been declared since 2016. OTSO's shareholders' equity before the dividend declaration is as follows: 10% Preference share capital (P300 par) Ordinary share capital (150 par). Retained earnings Ordinary share premium P3,000,000 1,500,000 4,000,000 200,000

Answer rating: 100% (QA)

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