Answered: Mack Company reported the following…

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 19P: Anoka Company reported the following selected items in the shareholders equity section of its...

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1. Mack Company reported the following outstanding share capital on December 31, 2020:
- 30,000 preference shares, 5% cumulative, par value P10, fully participating as to dividends. No dividends were in arrears.
- 200,000 ordinary shares, par value P1.
On December 31, 2019, the entity declared dividends of P100,000. What was the amount of dividends payable to ordinary share holders?

a. P34,000

b. P47,500

c. P40,000

d. P10,000

2. Knicks Corporation was organized on January 1, 2018 with authorized capital of P 2,000,000, P 20 par value. Subsequently, incorporators subscribed for 25,000 shares at P 24. How much must be paid up upon subscription to comply with the requirement of the Securities and Exchange Commission?Required to answer. Single choice.

a. P125,000

b. P500,000

c. P600,000

d. P150,000

3. On June 1, 2015, Golden Warriors Corporation declared a share capital dividend entitling its shareholders to one additional share for each share held. At the time the dividend was declared, the market value was P 100 per share and the par value was P 50 per share. On this date, Golden had 65,000 shares issued and 5,000 shares in the treasury. What entry should Golden make to record this June 1 transaction?Required to answer. Single choice.

a. debit Retained earnings-P6,000,000; credit Share Capital Dividend Distributable-P3,000,000; credit Paid in Capital from Share CapitalDividends-P3,000,000

b. debit Retained earnings-P6,500,000; credit Share Capital Dividend Distributable-P3,250,000; credit Paid in Capital from Share Capital Dividends-P3,250,000

c. debit Retained earnings-P3,250,000; credit Share Capital Dividend Distributable-P3,250,000;

d. debit Retained earnings-P3,000,000; credit Share Capital DividendDistributable-P3,000,000;

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