At the beginning of current year, Franta Company was authorized to issue share capital of 100,000 shares with P50 par value. The entity had the following share capital transactions during the year: Jan. 1 Sold 80,000 shares at P60 per share. May 1 Reacquired 4,000 treasury shares at P65 per share. Jul. 1 Approved a share split of 5 for 1. Oct. 31 Issued a 10% share dividend when the market value of a share is P25. Dec. 31 Reissued all of the treasury shares at P30. Dec. 31 Net income for the year was P3,000,000. If cash dividends of P2 is declared and paid at year-end, how much should be debited to accumulated profits for this cash dividends ?

At the beginning of current year, Franta Company was authorized to issue share capital of 100,000 shares with P50 par value. The entity had the following share capital transactions during the year: Jan. 1 Sold 80,000 shares at P60 per share. May 1 Reacquired 4,000 treasury shares at P65 per share. Jul. 1 Approved a share split of 5 for 1. Oct. 31 Issued a 10% share dividend when the market value of a share is P25. Dec. 31 Reissued all of the treasury shares at P30. Dec. 31 Net income for the year was P3,000,000. If cash dividends of P2 is declared and paid at year-end, how much should be debited to accumulated profits for this cash dividends ?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3RE

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