Problem #22

Missing Information for Shareholder's Equity

Laurente Corp. had the ff shareholder's equity section on its statement of financial position as at Dec 31, 2019.

Required:
1. Fill in the missing information
2. How many additional
performance. shares
What Effect wouldofthis
prefefrence shares can be
have on Laaurenre's the corporation issue? How Manny additional shares o
stock
price?
1
Preference
authorized, Shares, P50 2,300,000
authorized par, 100,000 shares authorized issued, and outstanding ₱
shares, 5,000,000.00
issued, 2,700,00 shares outstanding. 2,300,000
Share Premium Ordinary 17,000,000
Retained earnings 18,600,000
Total Shareholders' Equity and Retained Earnings ₱ 42,900,000.00
Treasury Stock, 68,000 shares at cost -748,000
Total Shareholders' Equity ₱ 42,152,000.00

2. Preference: 100,000 authorized shares - 100, 000 issued share = 0 unissued shares
Ordinary: 5,000,000 authorized shares - 2,368, 000 issued share = 2,632,000 unissued shares

3. Return on Equity=Profit/(Average Equity)

6,000,000/8,100,000= 74%

Problem #23
The shareholders' equity section of Buenaflor Technologies as at Dec 31, 2018 appeared as follows:

5% Cumulative Prference Shares, P100 par, 50,000 shares authorized, 20,000 shares issued
Ordinary shares, P5 par; 100,000 shares authorized; 25,000 shares issued
Share Premium Ordinary
Retained Earnings

1. 20,000 shares
2. 5,000,000
3. 125,000
4. 5
5. 5% or P5
6. 3,525,000

Problem #24
The shareholders equity section of Balocating Corporation's stetement of Financial position at the close of the curren
Required:
1. P80,000 annual dividend
2.150,000 Issued ordinary shares
3. 565,000
4. 750,000
5. 4,450,000
6. Total Dividend Paid to Shareholders = 287,200
Dividend Attribute to Preference Shareholders = 1,000,000 x 8%
Dividend Attribute to Preference Shareholders = 80,000
Dividend Attribute to Ordinary Shareholders = 287,200 - 80,000
= 207,200

Problem #25
After Formation on Aug 1, 2018, the ledger accounts of Ilano Corporation have the followimg balances:

Required:
1. Determine the following:
a. Shares Outstanding
a. 1,513,000 (Ordinary Shares (at par) / 250 (Par Value per share)
shares outstanding= 6,052

b. Subscribed Shares
b. 80,000 (Subscribed Ordinary Shares) / 250 (Par Value per Share)
80,000 / 250
Subscribed share=320

c. Preferance Share Outstanding

c. 250,000 (Preference Shares) / 500 (Par Value per Share)
Preference Share Outstanding= 500

d Preference Share Subscribed

d. 100,000 (Preference Shares Subscribed) / 500 (Par Value)
100,000 / 500
Preference Share Subscribed=200

e. At what
Shares average+price
Subscribed Sharehas ordinary
Premium) shares
/ 6,052 been subscribed or issued?
+ 320
(Shares Issued + Shares Subscribed)
1,653,000 / 6,372
Average Price= 259.42

f. Assume that no dvidends are paid in the first year of corporation's existence. What are the rights of the pr
non cumulative stocks does not entitle investors to reap any missed dividends therefore preference shareh

g. 80,000 + 60,000 (Subscribed Ordinary Shares + Share Premium) / 320 (Shares Subscribed)
140, 000 / 320
rights of the preference shareholders= 437.50

h. 250,000 + 100,000 (Outstanding + Subscribed) x 10% Percentage Dividends

350,000 x 10%
Dividends= 35,000
2. Statement of Financial Position

Ilano Corporation
Statement of Financial Position
Aug. 1, 2018

Assets
Current Assets
Cash
Accounts Recievable
Less: Allowance for Uncollectible Accounts
Merchandise Inventory
Total Current Assets
Non-Current Assets
Furnitures and Fixtures
Building
Organization Expense
Total Non-current Assets
Total Assets
Liabilities and Shareholders' Equity
Current Liabilities
Accrued Expenses
Accounts Payable
Notes Payable - Short Term
Total Current Liabilities

Problem #26
Recording Effects of Shareholders' equity Transaction in Ledger Accounts and Preparing Shareholders' Equ

Cash Ordinary Shares

1-May 100,000
1-Sep 56,000
Jan-15 60,000
2-Jan 60,000 bal/cr. 100,000
3-Jan 60,000 Feb-15 28,000
Mar-20 8,750
Sep-15 6,750
bal./dr 323,500

Treasury Stock Preference Shares

Feb-15 28,000
Mar-20 7,000
Sep-15 7,000 bal./cr. 60,000
 bal./dr 14,000

Donated Capital Organization Costs

Apr-30 75,000 Jan-31 11,200

bal/cr. 75,000

Share Premium-Treasury Subscription Receivable-Ordina

Mar-20 1,750 Jan-15 180,000
Sep-15 250

bal/cr. 1,500

Shareholders' Equity
Share Capital
Preference Shares, P50 par, 30,000 shares authorized, 1,200 shares
issued and outstanding
Ordinary Shares, P5 par, 100,000 shares authorized, 20,000 shares issued,
19,000 shares outstanding
Share Premium-Preference
Share Premium-Ordinary
Share Premium-Treasury
Donated Capital
Total Share Capital
Retained Earnings
Total Shareholders' Capital and Retained Earnings
Less: Treasury Stock, 1,000 shares, at cost
Total Shareholders' Equity
s at Dec 31, 2019.

nny additional shares of ordinary shares?

₱ 2,000,000.00
125,000
750,000
650,000

at the close of the current year follows:

are the rights of the prefernce shareholders.
ore preference shareholders has nno rights.
 tion
al Position
8

₱160,000
₱220,000
20,000 200,000
1,000,000
₱1,360,000

₱250,000
1,000,000
30,000
1,280,000
₱2,640,000
olders' Equity

₱50,000
400,000
250,000
₱700,000

ing Shareholders' Equity Section of Statement of Financial Position

Ordinary Shares Share Premium-Ordinary

1-May 40,000
3-Jan 60,000

bal/cr. 180,000

Preference Shares Share Premium-Preference

1-Sep 50,000
Jan-31 10,000
bal/cr. 7,200
Organization Costs Subscribed Ordinary Shares

3-Jan 60,000
bal./dr 11,200

ption Receivable-Ordinary Machinery

Apr-30 75,000
Jan-15 60,000
2-Jan 60,000
3-Jan 60,000

Equity

₱60,000

100,000

7,200
180,000
1,500
75,000
₱423,700
36,400
₱460,100
14,000
₱446,100
hare Premium-Ordinary
1-May 60,000
Jan-15 120,000

are Premium-Preference
1-Sep 6,000
Jan-31 1,200
bscribed Ordinary Shares
Jan-15 60,000

Machinery

bal./dr 75,000