Reference: Intermediate Accounting Vol.2 2021 Edition Valix p4

Problem 22-12 (AICPA Adapted) During 2021, Ray Company reported the following cash dividends on the P10 par value share capital: Ist quarter 2nd quarter 800,000 3rd quarter 900,000 4th quarter 1,000,000 1,100,000 The 4th quarter cash dividend was declared on December 20. 2021 to shareholders of record December 31, 2021 payable on January 31, 2022. In addition, the entity declared a 10% share dividend on December 1, 2021 when there were 300,000 shares issued and outstanding and the market value was P25 per share on declaration date and P30 distribution date. 1. What total amount was charged against retained earnings for the dividends? a. 3,800,000 re payable b. 4,550,000 c. 4, 700,000 d. 4, 100,000 2. What amount was credited to share capital for the share dividend? a. 300,000 750,000 450,000 O 3. What amount was credited to share premium for the share dividend? 600,000 450,000 300,000 O 793Problem 22-13 (AICPA Adapted) Solace Company declared and distributed 10% share dividend with fair value of P1,500,090 and par value of P1,000,000, and 25% share dividend with fair value of P4,000,000 and par value of P3,500,000. What aggregate amount should be debited to retained earnings for the share dividends? 4,500,000 3,500,000 5,000,000 5,500,000 Problem 22-14 (AICPA Adapted) Sol Company declared a 10% share dividend. The market value of the 300,000 outstanding shares of P50 par value was P90 per share on declaration date. When the share dividend was distributed, the share market value was P100. What amount should be credited to share premium for the share dividend? 1,200,000 2,700,000 1,500,000 O Problem 22-15 (AICPA Adapted) During the year, Grey Company issued 4,000 shares with P100 par value in connection with a share dividend. The market value per share on the date of declaration was P150. The entity provided the following shareholders' equity before issuance of the share dividend: Share capital, P100 par, 20,000 shares outstanding 2,000,000 Share premium 3,000,000 Retained earnings 1,500,000 What amount should be reported as retained earnings immediately after the share dividend? 1, 100,000 1,500,000 2, 100,000 900,000 794Problem 22-16 (ACP) sydney Company reported the following capital accounts at year-end: Share capital, par P25, authorized 150,000 shares, 55,000 shares issued of which 5,000 shares are in treasury Retained earnings 1,375,000 Treasury shares, at cost 2,000,000 150,000 The share was selling at P40 at this time. A 100% share dividend was declared and that all the treasury shares were issued as share dividends and the balance from the unissued shares. What amount of retained earnings should be capitalized? a. 1,250,000 b. 1,800,000 c. 1,275,000 d. 1, 125,000 Problem 22-17 (IAA) The directors of Ontario Company whose P50 par value share capital is currently selling at P60 per share have decided to issue a share dividend. The selling price is not expected to be affected by the share dividend. The entity with an authorization for 1,000,000 shares had issued 500,000 shares, of which 100,000 shares are now held as treasury. The entity capitalized P2,400,000 of the retained earnings. What percentage was declared as a share dividend by the directors? . 10% 8% 6%Problem 22-18 (IAA) Katrina Company reported the following shareholders' equity at the beginning of current year: Share capital, 250,000 shares authorized, P30 par 100,000 shares issued and outstanding 3,000,000 Share premium 4,000,000 Retained earnings 8,000,000 The board of directors declared a 10% share dividend on April 1 when the market value of the share was P70. The share dividend was issued on July 1 when the market value of the share was P100. The entity sustained a net loss of P1,200,000 for the current year. What amount should be reported as retained earnings at year-end? 6,100,000 6,500,000 6,800,000 5,050,000 Problem 22-19 (IAA) Kiara Company provided the following shareholders' equity at year-end: 2021 2022 Share capital, P100 par value 5,000,000 Share premium 5,100,000 Retained earnings 2,500,000 2,900,000 5,000,000 During 2022, the entity declared and paid cash dividend of P750,000 and also declared and issued a share dividend. There were no other changes in shares issued and outstanding during 2022. The net income for 2022 was P1,500,000. What amount should be reported as retained earnings on December 31, 2022? a. 5,250,000 5,750,000 5,650,000 6,500,040 796problem 22-20 (PHILCPA Adapted) Beauty Company provided the following information: Preference share capital, P500 par value, 2,200 shares Treasury preference shares, 100 shares at cost 1,100,000 ordinary share capital, no par, 3,000 shares at issue price 600,000 110,000 Retained earnings 2,500,000 The Board of Directors resolved to pay a 100% share dividend on all shares outstanding capitalizing amounts of retained earnings equal to the par value of preference shares outstanding and the issue price of the ordinary shares outstanding. Subsequently, the Board of Directors resolved to pay a cash dividend of 10% on preference share and a cash dividend of P10 per ordinary share. 1. What amount should be reported as adjusted retained earnings? a., 1, 450,000 . 1,900,000 580,000 640,000 2. What amount should be reported as shareholders' equity after effecting the dividend transactions? a. 4,090,000 3,810,000 3,820,000 d. 3,955,000 Problem 22-21 (AICPA Adapted) Ray Company declared a 5% share dividend on 100,000 issued and outstanding shares of P20 par value, which had a fair value of P50 per share before the share dividend was declared. The share dividend was distributed 60 days after the declaration date. What amount should be reported as an increase in current liabilities as a result of the share dividend declaration? 250,000 100,000 150,000 O 797Problem 22-22 (IAA) Gem Company reported the following shareholders' equity at the beginning of current year, Share capital, P20 par, authorized 200,000 shares, issued and outstanding 100,000 shares Share premium 2,000,000 Retained earnings 3,000,000 7,500,000 On March 1, the board of directors declared a 15% share dividend, and accordingly 15,000 additional shares were issued. On March 1, the fair value of the share was P60. The entity sustained a net loss of P1,000,000 for the current year. What amount should be reported as retained earnings at year-end? 5,600,000 6,200,000 6,600,000 7,200,000 Problem 22-23 (IAA) At the beginning of current year, Flash Company had retained earnings of P4,000,000. Throughout the year, the entity had 600,000 shares of P10 par value issued and outstanding. During the current year, the entity reported net income of P2,000,000, sold treasury shares at a "gain" of P720,000, declared a cash dividend of P1, 200,000, and declared and issued a 10% bonus issue when the fair value of the share was P20, What amount should be reported as retained earnings at the end of current year? a. 3,600,000 4,200,000 4,320,000 4,920,000 798Problem 22-24 (IAA) Kremlin Company reported the following shareholders' equity at year-end: Share capital, P50 par value 3,000,000 Share premium 600,000 Retained earnings 4,200,000 15% share dividend was declared and distributed at year-end when entity's share was selling at P65. What amount should be reported as share capital outstanding? a. 3,450,000 b. 3,585,000 c. 3,615,000 d. 4, 185,000 Problem 22-25 (AICPA Adapted) On December 31, 2021, the board of directors of Blake Company declared a cash dividend of P800,000 to shareholders of record on January 15, 2022 and payable on February 15, 2022. The entity reported the following data on December 31, 2021 before declaration of dividend: Accumulated depletion 500,000 Share capital 9,000,000 Share premium 300,000 Retained earnings - December 31, 2021 600,000 Net income for 2021 150,000 What amount should be reported as liquidating dividend? a. 600,000 300,000 200,000 150,000 799