Problem #32

1. After the share split on Jan. 12, what was the amount of total shareholder's equity
200,000 x 2 = 400,000 Number of Shares, P20/2 = 10 Par Value
400,000 x P10= 4,000,000 Balance of Ordinary Share Captal
The share split only increases the number of shares and decrease the par value, the total balance remains the same.
Ordinary Share Capital ₱4,000,000
Share Premium 3,600,000
Retained Eamings 5,700,000
Total Shareholders' Equity ₱13,300,000

2. After the share spilt on Jan. 12, what was the balance in the ordinary shares account?
The share split only increases the number of shares and decrease the par value, the total balance remains the same.
200,000 x 2 = 400,000 Number of Shares, P20/2 = 10 Par Value
400,000 x P10 = 4,000,000 Balance of Ordinary Share Capital

3. After the share dividend on Jan. 20, what's the balance in the retained eamings?
400,000 shares x 5% = ₱20,000
Multiplied by: Market Price 55
Decrease in Retained Eamings P1,100,000 ₱1,100,000

Beginning Balance ₱5,700,000

Decrease in Retained Eamings 1,100,000
Retained Earnings, Ending ₱4,600,000

4. After the share dividend on Jan. 20, what's the amount of the firm's total net assets?
Ordinary Share Capital ₱4,000,000
Share Premium 3,600,000
Retained Eamings 4,600,000
Net Assets ₱12,200,000

5. After the treasury stock purchase, by how much did the firm's assets increase or decrease, if any?
5,000 shares x 54 per share = P270,000 Decrease in Net Assets

6. Prepare the journal entry for the share dividends on Jan. 30

Ordinary Shares ₱420,000
Less: Treasury Stocks 5,000
Outstanding Shares ₱415,000
Multiplied by: Dividend Rate 20%
Shares Dividends ₱83,000
Multiplied by: Market Price 52
Shares Dividends ₱4,316,000
Less: Par (79,000 x 10) 790,000
Share Premium P3,526,000 ₱3,526,000

Retained Earnings 4,316,000

Share Dividends Payable
Share Premium

7. Balance of Retained Earning account at the end of January

Retained Eamings, beginning bal.
Add: Profit, Jan. 31
Total
Less: Declaration of 5% Dividend
Declaration of Cash Dividends = 415,000 shares x 0.45
Declaration of 20% Dividend
Retained Earnings, ending bal.

Problem #33
Statement of CashFlows

Bobadilla Corporation
Statement of Cash Flows

Cash flows from financing activities:

Issuance of Ordinary Shares
Sale of Treasury Stock
Dividends Paid
Net Cash from financing activities:

Non-cash financing activity: P2,000,000 of convertible preference shares was converted to ordinary shares.

Issuance of Ordinary Shares:

Preferred Shares converted to Ordinary Shares = (P2,000,000/100) x 3 x P1=
Credit to Ordinary Shares from issuance = (P800,000 - P600,000 - P60,000) =
Share Premium from conversion of Preferred Shares = P2.000.000 - P60,000 =
Credit to Share Premium from issuance = P9,940,000 - 3,000,000 - 1,940,000 + 20,000 =
Book value of treasury stock sold = P400,000 + P130,000 =
Debit to Share Premium from sale of treasury = P270,000 - P250,000 =
Dividends declared = P7,000,000 + P1,300,000 + P8,000,000 =

The problem is silent as to whether the dividend was paid in cash or not. If dividend was not paid yet, please remove "Dividen

Problem #34
Book Value per share

Preference Shares:
Liquidation Value, P104 x 500
Current Dividends 8% x 50,000
Preference Shareholders' Equity
 Book Value per Share, 56,000/ 500 shares

Ordinary Shares
Total Shareholders' Equity
Less: Preference Shareholders' Equity
Ordinary Shareholders' Equity

Book Value per Share, 1,185,000/ 40,000

shares

Problem #35
Book Value Per Share

Preference Shares
Liquidation Value, 1,050 x 1,000
Preference Shareholders' Equity

Book Value per Share, 1,050,000/ 1,000 shares

Ordinary Shares
Total Shareholders' Equity
Less: Preference Shareholders' Equity
Ordinary Shareholders' Equity

Book Value per Share, 6,950,000/ 10,000 shares

Problem # 36
Book Value per Share

1. What is the market value of the ordinary shares?

2. What are the par values of the preference shares and ordinary
shares?
3. If no dividends are in arrears, what are the book values per
share of the preference and ordinary shares?
4. If two years' preference dividends are in arrears, what are the
book values per share of the preference and ordinary shares?
5. If two years' preference dividends are in arrears and the
preference shares has a liquidaqtion value of P110 per share,
what are the book values per share of the preference and ordinary shares?
Preference Shares, 5%, P100 par value, 1,000 shares authorized,
issued and outstanding
Ordinary Shares, P40 par value, 4,000 shares authorized, issued
and outstanding
Retained Earnings
Total Shareholders' Equity

Preference Shares:
Liquidation Value, P170 x 1,000 shares
Current Dividends 5% x 100,000
Preference Shareholders' Equity

Book Value per Share, 175,000/ 1,000 shares

Ordinary Shares:
Total Shareholders' Equity
Less: Preference Shareholders' Equity
Ordinary Shareholders' Equity

Book Value per Share, 385,000/ 4,000

shares

Preference Shares:
Liquidation Value, P170 x 1,000 shares
Dividends in Arrears, 5% x 100,000 x 2 years
Current Dividends 5% x 100,000
Preference Shareholders' Equity

Book Value per Share, 185,000/ 1,000 shares

Ordinary Shares:
Total Shareholders' Equity
Less: Preference Shareholders' Equity
Ordinary Shareholders' Equity

Book Value per Share, 375,000/ 4,000 shares

Preference Shares:
Liquidation Value, P110 x 1,000 shares
Dividends in Arrears, 5% x 100,000 x 2 years
 Current Dividends 5% x 100,000
Preference Shareholders' Equity

Book Value per Share, 125,000/ 1,000

Ordinary Shares:
Total Shareholders' Equity
Less: Preference Shareholders' Equity
Ordinary Shareholders' Equity

Book Value per Share, 435,000/ 4,000 shares

alance remains the same.

alance remains the same.

 790,000
3,526,000

₱5,700,000
360,000
₱6,060,000
₱1,100,000
186,750
4,316,000 5,602,750
₱457,250

5,160,000
250,000
(300000)
5,110,000

ordinary shares.

60,000
140,000
1,940,000
5,020,000
270,000
20,000
300,000

t paid yet, please remove "Dividends paid" in cash flow.

52,000
4,000
56,000
 ₱112

1,241,000
56,000
1,185,000

₱29.63

₱ 1,050,000.00
1,050,000

1,050

8,000,000
1,050,000
6,950,000

₱ 695.00

680,000
100 & 40

175 & 96.25

185 & 93.75

125 & 108.75

 100,000

160,000

300,000
560,000

170,000
5,000
175,000

175

560,000
175,000
385,000

96.25

170,000
10,000
5,000
185,000

185

560,000
185,000
375,000

93.75

110,000
10,000
 5,000
125,000

125

560,000
125,000
435,000

108.75